Economic, Social, and Environmental

Rebellion, Rascals, and Revenue: Tax Follies and Wisdom Through the Ages

BY MICHAEL KEEN AND JOEL SLEMROD. Princeton University Press, 2021, 536 pp.

Pretty much everyone dismisses tax policy as dull and dry—except the attorneys, accountants, and civil servants dedicated to collecting taxes or avoiding (or evading) them. Keen and Slemrod, two leading public finance specialists, demonstrate that, in fact, taxes are anything but dull. Relying on historical vignettes, they show that taxation can have unintended consequences; they describe, in one instance, how the English window tax of 1696 led to dark, dank, and even windowless homes. Their book is also a reminder of the importance of getting history right. They explain, for example, that the Boston Tea Party was actually a revolt against lower taxes— not higher ones—which threatened the livelihood of American tea smugglers. Keen and Slemrod use these stories as a frame for thinking about the challenges of taxation today. They ask, for example, what genetic markers that reliably predicted a person’s lifetime income would mean for defining tax liabilities. In step with policymakers in the Biden administration, the authors point to the need for fundamental changes in how governments tax corporate profits in a world of footloose balance sheets. It is hard to imagine a more timely—and entertaining—history of the fisc.

How Antitrust Failed Workers

BY ERIC A. POSNER. Oxford University Press, 2021, 224 pp.

Antitrust enforcement in the United States, starting with the Sherman Antitrust Act of 1890, has long focused on product-market competition and its antithesis, the monopoly provision of goods and services. In contrast, courts

and regulators have largely neglected monopsony, where there exists one or a small handful of purchasers of goods and services, including labor services. Whether through noncompete clauses or simple market power, employers dominating local labor markets can depress wages and weaken worker protections. The author blames neglect of this issue on legal theorists’ nearly exclusive attention to consumer welfare and economists’ assumption that labor markets are generally competitive. He might have added a role for history and path dependence: antitrust efforts focus on monopoly today because they’ve focused on it for over a century. Posner concludes by showing that this imbalance can be righted within the existing legal framework if those responsible for antitrust policy wake up to the problem.

The Spirit of Green: The Economics of Collisions and Contagions in a Crowded World

BY WILLIAM D. NORDHAUS. Princeton University Press, 2021,

368 pp.

Nordhaus builds on a lifetime of work incorporating the concept of externalities into national income accounts and into conceptions of economic growth. He reminds the reader that although private markets are needed to ensure the ample supply of most goods and services, only governments can adequately provide collective goods such as pollution control and public health. He advocates using market mechanisms such as carbon taxes to offset externalities, applying this insight to multiple areas beyond carbon emissions and climate change. Such taxes would not be a drag on the economy; by correcting market failures, they would boost the rate of economic growth. Although Nordhaus emphasizes the indispensability of public policy intervention, coordinated at the international level, in the quest for a greener world, he also sees roles for private ethics and corporate social responsibility.

Three Days at Camp David: How a Secret Meeting in 1971 Transformed the Global Economy

BY JEFFREY E. GARTEN. Harper, 2021, 448 pp.

Garten provides a richly detailed, character-driven account of the weekend in 1971 when U.S. President Richard Nixon and his advisers suspended the convertibility of the U.S. dollar into a fixed quantity of gold and pulled the plug on the Bretton Woods international monetary system. It is not an overstatement to assert, as the author does, that this weekend at Camp David was a historic turning point for the global economy. Drawing on archival sources and participant interviews, Garten recounts the unfolding drama, which inaugurated an era of greater exchange-rate flexibility and thereby opened the door to freer international capital mobility. At the same time, the demise of the Bretton Woods system changed some aspects of the global monetary and financial order less radically than anticipated at the time. In particular, the dollar, which under the Bretton Woods system enjoyed the “exorbitant privilege” of being the sun around which other currencies orbited, remains the dominant international and reserve currency even today.