“Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer” by Dean Baker delves into the complex mechanisms that have shaped the modern global economy, arguing that the rules of globalization were intentionally crafted to benefit the wealthy elite at the expense of the broader population. Baker, a prominent economist and co-director of the Center for Economic and Policy Research, presents a compelling critique of economic policies that have exacerbated inequality. His central thesis is that the concentration of wealth and power in the hands of a few is not an inevitable result of market forces, but rather the outcome of deliberate policy choices.

Baker begins by exploring the origins of economic inequality, challenging the commonly held belief that globalization is an unstoppable force of nature. He argues that the policies implemented over the past few decades, particularly those related to trade, intellectual property, and labor markets, have been designed to disproportionately benefit the rich. For example, the expansion of intellectual property rights, especially in the pharmaceutical and technology industries, has allowed corporations to charge exorbitant prices for essential goods and services. This has created significant barriers to entry for smaller competitors and exacerbated income inequality.

Example 1: Baker highlights the case of the pharmaceutical industry, where extended patent protections have led to high drug prices, limiting access to life-saving medications for many people. This policy, Baker argues, prioritizes corporate profits over public health, illustrating how the rules of the modern economy are rigged in favor of the wealthy.

Quote: “The rules of the game have been rewritten to ensure that the rich get richer, not as a result of hard work or innovation, but through the manipulation of economic policies.” This quote encapsulates Baker’s argument that the current economic system is designed to benefit a select few.

One of the key sections of the book focuses on the role of intellectual property (IP) and trade policies in perpetuating economic inequality. Baker contends that IP laws, especially those governing patents and copyrights, have been expanded far beyond their original intent. Instead of promoting innovation and creativity, these laws now serve to entrench the market power of large corporations, allowing them to reap enormous profits while stifling competition.

Example 2: Baker discusses the case of Microsoft and its near-monopoly on operating systems in the 1990s. He argues that the company’s dominance was not solely due to its technological innovations, but also because of aggressive IP enforcement that prevented competitors from challenging its market position.

Baker also criticizes trade agreements like the North American Free Trade Agreement (NAFTA) and the Trans-Pacific Partnership (TPP), which he claims have been designed to protect corporate interests rather than to promote fair competition. These agreements, according to Baker, often include provisions that weaken labor rights and environmental protections, further disadvantaging workers and the environment in favor of corporate profits.

Quote: “Intellectual property and trade policies have become the tools of the wealthy elite, ensuring that the benefits of globalization flow to those at the top, while the costs are borne by the rest of society.” This statement underscores Baker’s critique of how economic policies have been skewed to benefit the few at the expense of the many.

Baker argues that the erosion of workers’ rights is another critical factor contributing to economic inequality. He points out that policies that weaken labor unions, suppress wages, and reduce job security have all played a role in shifting wealth from workers to capital owners. Baker challenges the notion that these changes were necessary for economic growth, instead asserting that they were deliberate choices made to benefit the wealthy.

Example 3: The decline of unionization in the United States is a case in point. Baker discusses how legislation and court rulings have systematically undermined unions, making it difficult for workers to collectively bargain for better wages and working conditions. The result has been a significant shift in income from labor to capital, exacerbating inequality.

Baker also addresses the issue of minimum wage laws, arguing that the failure to raise the minimum wage in line with inflation and productivity gains has further widened the income gap. He points out that while corporate profits have soared, the real wages of many workers have stagnated or even declined.

Quote: “The decline of unions and the erosion of workers’ rights were not accidents of history, but the results of deliberate policy choices made to benefit the wealthy at the expense of the working class.” This quote highlights Baker’s view that the current state of the labor market is a product of intentional decisions rather than natural economic forces.

Baker also examines the role of the financial sector in exacerbating economic inequality. He argues that the deregulation of the financial industry, which began in the 1980s, paved the way for the speculative bubbles and financial crises that have had devastating effects on the global economy. According to Baker, these crises have disproportionately harmed the poor and middle class, while the wealthy have often emerged unscathed or even benefited from the aftermath.

Example 4: The 2008 financial crisis is a prime example of how the rules of the modern economy are rigged. Baker explains how the crisis was precipitated by reckless lending practices and the proliferation of complex financial instruments, all of which were enabled by a lack of regulation. When the bubble burst, millions of people lost their homes and jobs, while the financial institutions that caused the crisis were bailed out with taxpayer money.

Baker criticizes the government’s response to the crisis, arguing that the bailout of banks and other financial institutions reinforced the idea that the wealthy could take risks without facing the consequences. This, he contends, has only served to entrench economic inequality further.

Quote: “The financial sector has become a mechanism for transferring wealth from the many to the few, with the full backing of government policies that protect the interests of the rich.” This quote encapsulates Baker’s critique of how the financial industry and government policies have conspired to enrich the wealthy at the expense of the broader population.

In the final section of the book, Baker offers a range of solutions to address economic inequality and create a more just and equitable economy. He advocates for reforms that would reverse the rigging of the economy, such as stronger labor protections, progressive taxation, and the reining in of corporate power.

Example 5: Baker proposes the implementation of a financial transactions tax (FTT) as a way to curb speculative trading and generate revenue that could be used to fund social programs. He argues that such a tax would not only reduce the likelihood of financial bubbles but also help to redistribute wealth more fairly.

Baker also calls for the expansion of public options in areas like healthcare and education, which he believes would reduce the burden on individuals and level the playing field. He emphasizes the importance of democratic control over economic policies, arguing that the public should have a greater say in how the economy is structured and who it benefits.

Quote: “Creating a fair economy is not about charity, but about ensuring that the rules are designed to benefit everyone, not just the wealthy few.” This quote reflects Baker’s belief that economic justice requires systemic change, not just piecemeal reforms.

“Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer” by Dean Baker is a powerful indictment of the modern economic system and the policies that have led to growing inequality. Baker’s analysis challenges the notion that economic inequality is an inevitable result of globalization and technological change, arguing instead that it is the product of deliberate policy choices. By exposing the ways in which the economy has been rigged to benefit the wealthy, Baker calls for a fundamental rethinking of economic policies to create a more just and equitable society.

The book has been well-received for its clear and accessible writing, as well as its thorough analysis of complex economic issues. It has resonated with readers and critics alike, particularly in the context of growing concerns about inequality and the influence of money in politics. As debates over economic policy continue to evolve, Baker’s work remains a crucial contribution to the conversation about how to build an economy that works for everyone, not just the rich.

By focusing on specific policies and providing concrete examples, “Rigged” offers readers a detailed understanding of how economic inequality has been constructed and what can be done to address it. It is a must-read for anyone interested in understanding the true forces shaping our economy and what can be done to create a fairer world.