The Winner-Take-All Society: Why the Few at the Top Get So Much More Than the Rest of Us

by Philip J. Cook and Robert H. Frank

Book Overview

Disney chairman Michael Eisner topped the 1993 Business Week chart of America's highest-paid executives, his $203 million in earnings roughly 10,000 times that of the lowest paid Disney employee.

During the last two decades, the top one percent of U.S. earners captured more than 40 percent of the country's total earnings growth, one of the largest shifts any society has endured without a revolution or military defeat. Robert H. Frank and...

• Format: Paperback
• Language: English
• ISBN: 0140259953
• ISBN13: 9780140259957
• Release Date: September 1996
• Publisher: Penguin Books
• Length: 288 Pages
• Weight: 0.78 lbs.
• Dimensions: 0.7" x 5.6" x 8.4"
• Age Range: 18 years and up
• Grade Range: Postsecondary and higher

Customer Reviews

Brilliant book

Brilliant book, though the practical outlines of reversing the trends that drive our society towards a winner-takes-all-society may not be easy, or simply feasible. The argumentation is very solid and based on different literature, which makes the bibliography equally interesting. Though the numbers are outdated, one can only see that in current society the numbers for the winners have only - and extremely - augmented. Which proves the book was right but the ideas haven't made the political agenda.

Interesting Book by 2 Top Notch Economists

This book basically says that the rat race is harmful and we should constrain spending, because happiness isn't really what we have, but what our neighbor has; therefore, by creating incentives to spend less, we can create a trickle-down effect of less consumption and have more time and less coarseness in culture. The only problem is that the authors--as bright as they are--do not spend much time explaining exactly how a consumption tax would work. One gets the feeling that they felt going into specific details was inappropriate for a mass-market book. Along the way, we also learn about fun variations on game theory, the predecessor to Paris Hilton, and some prescient warnings on steroids. Despite the negative comments about lawyers in the book, I enjoyed it very much. The author reminds his readers, through facts and research, to be more humble and to remember that because the number of top positions is few in the U.S., it cannot be the case that all our dreams will be realized. While depressing on the surface, one may wish the participants on American Idol had read this book before appearing on national television.

An Explanation for the Growing Economic Inequality

The basic premise of this book is that the U.S. has too many markets where the "star" or top performer gets a large percentage of the proceeds. Examples are the sports market, the movie star market and the publishing market; The reasons given are;-Technology. National distribution channels such as network television make it easier for an individual to penetrate the market. For example, at one time villages and towns had their own musicians. Now a singer can make a CD and sell it nationally.-Falling transportation and tariff costs. Goods have gotten lighter. It is easier to send computer discs all over the world than books. CD's are lighter than phonograph records-- Mental shelf space constraints. We have a limit to the number of items we can keep in our head..."the amount of information we can actually use is thus a declining fraction of the total information available."-Weakening of regulations and civil society. At one time, informal and formal rules limited the winner take all markets. Now, like free agents in baseball, the top performers have the leverage to demand high prices. -Self-reinforcing processes. This is another way of saying "success begets success." For example, a sales person does well and gets bigger customers. A person does well and the word of mouth referral causes them to saturate the market. This virtuous cycle increases the income and power of top performers.The author argues that winner take all markets are not good for society. People are unrealistically optimistic about their own chances of winning "a prize." Thus they are siphoned off from other productive endeavors. This book was helpful to me in understanding today's economy and job market. If anything, the winners are doing better than ever today, long after the book was published. Just take a look at the latest article on CEO salaries.

Commentary from a Chicago school follower

This book is very well written, presenting an argument questioning some of the assumptions that the neo-classical economists make regarding human behavior. While I formerly thought that the outcome of a free market is always socially optimal, I cannot resist the conclusion after reading Frank that some regulations are necessary to divert us from our tendency to engage in arms races for relative status into other more productive activities. The book presents a sound argument for why popular culture has degraded so, and why some people make grossly large incomes, explaining each not on sociological grounds, but rather in terms of the increasing scope and competitiveness of markets. It is not technical in style, so even an Econ B.A. like myself can understand it in its totality (or anyone else, for that matter). The book promises in the beginning to demonstrate who there is not necessary a trade off between equity and efficiency, and in the end, it delivers. More than anything, if you look at the salary of an NBA player and question, "Is his jumpshot really worth $50 million/year? Are we paying him for something that is socially valuable?" then this book is for you. Frank's answer to that question is NO, and that incomes like those induce people to make erroneous career choices (like students who opt for playing hoops over studying math). The result of the free market then, is wasted talent that could have been useful in another application. MIZZOU ECON RULES!

Important consequence of the global economy

This is an important book on the social consequences of improved communications and the broadening of markets. As the Internet promises to accelerate these trend, this becomes an increasingly pertinent read.