The Age of Conformity: A Review

In his book "The Age of Conformity," Nobel Prize-winning economist Paul Krugman argues that the global economy is facing a crisis of conformity. He contends that the world's major economies are becoming increasingly similar, and that this is leading to a slowdown in economic growth and a rise in inequality.

The Problem with Conformity

Krugman argues that conformity is a problem because it leads to a lack of diversity in the global economy. When economies are all following the same playbook, they are less likely to come up with new ideas and innovations. This can lead to a slowdown in economic growth, as there are fewer new opportunities for businesses to exploit.

In addition, conformity can lead to a rise in inequality. When economies are all competing on the same terms, it is the largest and most powerful companies that are most likely to succeed. This can lead to a widening gap between the rich and the poor, as the small businesses and entrepreneurs that are essential for a healthy economy are squeezed out.

The Causes of Conformity

Krugman identifies a number of factors that are contributing to the rise of conformity in the global economy. These include:

• The rise of global supply chains: Global supply chains have made it easier for companies to outsource production to low-wage countries. This has put pressure on companies in developed countries to cut costs, which has led to a decline in wages and benefits for workers.
• The increasing power of multinational corporations: Multinational corporations have become increasingly powerful in the global economy. These companies have the resources to invest in new technologies and to lobby governments for favorable policies. This has given them a significant advantage over small businesses and entrepreneurs.
• The spread of neoliberal economic policies: Neoliberal economic policies, such as deregulation and free trade, have contributed to the rise of conformity in the global economy. These policies have made it easier for large companies to compete with small businesses, and they have also made it more difficult for governments to regulate the economy.

The Consequences of Conformity

Krugman argues that the rise of conformity in the global economy is having a number of negative consequences. These include:

• A slowdown in economic growth: The lack of diversity in the global economy is leading to a slowdown in economic growth. This is because there are fewer new opportunities for businesses to exploit, and because the large companies that dominate the economy are less likely to invest in new technologies.
• A rise in inequality: The rise of conformity is also leading to a rise in inequality. This is because the large companies that dominate the economy are more likely to pay their workers low wages and benefits.
• A decline in democracy: The rise of conformity is also leading to a decline in democracy. This is because the large companies that dominate the economy have a significant amount of political power, and they use this power to influence government policies in their favor.

The Way Forward

Krugman argues that there are a number of things that can be done to address the problem of conformity in the global economy. These include:

• Strengthening antitrust laws: Antitrust laws can be used to break up large companies and to prevent them from abusing their market power. This would create more opportunities for small businesses and entrepreneurs, and it would also help to reduce inequality.
• Regulating global supply chains: Global supply chains can be regulated to ensure that workers are paid fair wages and benefits. This would help to reduce inequality and it would also make it more difficult for large companies to exploit workers in developing countries.
• Promoting alternative economic models: There are a number of alternative economic models that can be used to address the problem of conformity. These models include cooperatives, worker-owned businesses, and social enterprises. These models can help to create a more diverse and sustainable economy.

Conclusion

"The Age of Conformity" is a powerful and provocative book that offers a new perspective on the global economy. Krugman argues that the rise of conformity is a serious problem that is leading to a slowdown in economic growth, a rise in inequality, and a decline in democracy. He also offers a number of solutions that can be used to address this problem. This book is essential reading for anyone who wants to understand the global economy and the challenges it faces.