Labyrinths of Prosperity

Why do some societies prosper and others fail? In a world full of worries about deficits and debts in some societies, and hopes for prosperity under more democratic regimes in others, this book offers a new way of looking at both the worries and the hopes.

Examining many states past and present, Brenner shows that properity is sustained when people daringly take risks and bring good ideas to life. Trade, relying on the democratization of capital, is the source of prosperity. Brenner, who grew up in a communist country, also shows that when monopolistic governments interfere with the wheels of trade, they destroy trust and ambition -- the foundations of civil, prosperous society -- and bring about destructive traits of envy, resentment, and passivity -- no matter what progress the economics statistics appear to show.

But he goes further to show that the numbers politicians and bureaucrats live by in Western democracies are unreliable too. Brenner demonstrates that shaping policies according to the dictates of macroeconomics theory and acting in response to changes in such aggregate statistics as Gross Domestic Product cannot and does not lead to prosperity. He argues that we should stop depending on economic statistics and discard the misleading language of the macroeconomics from public discourse.

Brenner asks how the myth that governments can tax, regulate, and spend their way to prosperity became established, and how such error and such persistent error can be avoided in the future. He concludes that direct democracy, relying on the institutions of referenda and initiatives, which also has the effect of separating the powers to tax and spend, can achieve this goal. Referenda would force discussion of government politicies to be concrete, rather than abstract. They would help to revitalize democracy in the West and also help to restore trust and cooperation in other societies around the world. In so doing, direct democracy would bring about good governance and prosperity.

Praise / Awards

• "Every once in a while an economist comes along who threatens to overturn conventional wisdom by pointing out that the basic tools of the trade--such as the official statistics used to fine-tune policy recommendations--are blunt and ineffectual instruments. Reuven Brenner is such an iconoclast among economists."
  --Judy Shelton, Wall Street Journal