Robert Frank and Philip J. Cook have written a most interesting book that explains why the salary of a typical American executive today is 120 times that of the average manufacturing worker when it was 35 times that in 1974; why "the incomes of the top 1 percent more than doubled in real terms between 1979 and 1989, a period during which the median income was roughly stable and in which the bottom 20 percent saw their income actually fall by 10 percent."

The authors reject the arguments that these horrifying statistics result from productivity increases, or the failure of tho se at the bottom to take advantage of opportunities, lack of education (Robert Reich), or genetic inferiority (Charles Murray). They blame what they call the "Star System," which has become common in many fields (OJ. Simpson's attorneys, corporation raiding of big name executives, etc.); a "reward structure common in entertainment and sports - where thousands compete for a handful of prizes at the top .... "

They argue this distorts society by diverting talented people into competitions almost all will lose. "Winner- Take-All markets attract too many contestants in part because of a common human frailty with respect to gambling - namely, our tendency to overestimate our chances of winning," i.e., the "Lake Wobegon Effect," where all the men are good-looking and all the children are above-average. ( )

A thought-provoking book that goes steadily downhill: The first half to 2/3 of this book makes some very good points that have escaped most of the popular discussions of economic issues. The authors point out, persuasively in my opinion, that certain industries and professions have "winner-take-all" characteristics that pervert the usual reward/punishment consequences of free-market economic policies.

The markets for which the authors have the strongest evidence of "winner take all" characteristics are presented earliest. As the book goes on, however, it falls into the same pattern of thousands of books before it: the authors have made one important and interesting observation, and they proceed to claim that virtually everything in the world that they disapprove of can be accounted for by this one observation. They assume, without plausible evidence, that the declines in education and popular culture are the direct consequence of winner-take-all markets. In a couple of cases they even admit that the evidence for winner-take-all characteristics in a particular industry or occupation is scanty or even nonexistent. But that doesn't prevent them from offering further arguments and policy recommendations based on the assumption that every one of these markets is dominated by winner-take-all distortions.

By the end of this book, where the authors make policy recommendations, they come close to leaving reality behind. They make these recommendations based on the assumptions that the **entire economy** is dominated by winner-take-all characteristics - a proposition for which they offer no evidence whatever. It is hard to escape the impression that their goal in writing this book was to justify a more socialistic economic policy on the part of the government, rather than to evenhandedly examine and explain an important issue.

In short: read the first of half of this book, because it makes a lot of worthwhile points and observations. Read most of the rest if you're retired or have a lot of free time. Skip the last chapter, with their policy recommendations.

Magnificent thesis which has become even more relevent since it was written. This books helps you understand where you are getting sucked in by false promises. ( )