Roger L. Martin
When More Is Not Better: Overcoming America’s Obsession with Economic Efficiency
Harvard Business Review Press, 2020
Reviewed by Hélène Estèves
In When More Is Not Better: Overcoming America’s Obsession with Economic Efficiency, Roger L. Martin brings tangibility and optimism to a complex topic that is the failure of the American politico-economic model since the 1970s. Martin predicates that democratic capitalism is the optimal system for a modern society, but in recent decades it has not produced any of the tangible results it delivered in its first centuries of existence, as demonstrated by the recent rise of inequalities, the concentration of wealth in the hands of a few, and the loss of upward social mobility. Drawing from this assessment, Martin seeks to demonstrate that the root of the problem with the American democratic capitalistic system is not structural but essentially caused by a sum of behaviors and laws that have been overly drawn to producing economic efficiency, resulting in the malfunction of an otherwise fair and serviceable system. In this book, he exposes the mechanics behind the decline of said system and proposes solutions to “save American democratic capitalism” that revolve around rethinking the way we see this economic model and adjusting the way we interact with it.
Martin’s aim is not just to expose a dysfunctional system but also to give keys to his readers (whether government officials, businessmen, or individuals) to help fix the democratic capitalist model. The structure of the book (Part 1 Problem, Part 2 Solutions) offers a glimpse into Martin’s dynamic approach, with the author pointing out that many economy books expose issues and their systemic roots without ever giving enough actionable takeaways to their readers. The structure of When More Is Not Better aims to tackle this imbalance, with three chapters dedicated to exposing the problem and four chapters (47% of the book, according to the author) dedicated to providing actionable advice to readers, regardless of the role they play in the economic system. In both the Problem and Solutions sections, the author produces a clear exposé using theory, concrete examples, and well-chosen anecdotes. The result is an accessible piece that functions as both an economic theory refresher course and a how-to guide for those who wish to help solve a macro problem at their own scale.
In the first two chapters, Martin demonstrates that democratic capitalism does not do what it used to for white Americans—namely, social mobility, economic growth, and democratic stability. The downside of broadly embraced neo-classic models and theories from economists Smith, Ricardo, and Leontief is an oversimplification of the economy that enabled the rise of the concept of productivity and an inordinate pursuit of economic efficiency—meaning using every scarce resource to maximize the economic output.
The author regrets that “there is a powerful assumption that if we achieve progress on proxies, we will achieve progress overall.” Since the 1970s, the growing use of wrong proxies to measure efficiency has created a disproportionate amount of pressure on economic actors, resulting in a focus on immediate and optimized output in every sector, and as a consequence, an underlying imbalance of the economy and flawed policymaking. In Chapter Three: “Pareto Tower Economy,” Martin shows through a variety of examples, like the waste management company sector or the almond production industry in California, how the search for efficiency results in monopolies, the interdependence of too many economic actors, and in turn, a lack of resiliency of the economic system as shown by the 2008 subprime crisis, which affected a remarkable amount of sector and countries around the world.
In the fourth chapter and conclusion to the first part, Martin argues that fundamentally the American economic system is a complex adaptive system and should be treated as such, rather than a linear system in which the faulty components can be isolated and fixed. An overarching theme of the work is that upon changing the way we see the model and adjusting the way we manage it—an organic ecosystem that requires perpetual tweaking through rules and laws, rather than a perfectible machine—we will save democratic capitalism. In the first chapter of the second part, “Achieving Balance in America’s Natural System,” Martin lays out his agenda for all actors of the American economy: urging them to balance resiliency with efficiency, apply productive friction to their endeavors, and drive improvement without seeking perfection.
The last three chapters provide concrete advice and strategy for, respectively, business executives, policymakers, and individuals from various horizons, with concrete applications of the agenda cited in Chapter Five. The use of a variety of examples and anecdotes brings a lot of color and details to an otherwise often abstract and sometimes almost philosophical agenda. Martin’s own professional knowledge of the corporate environment and experience as a business strategist allow him to dismantle some popular private management techniques that serve neither the consumer nor the employees or the corporation. Without delving into politics, his chapter on policy encourages policymakers to treat the economy as an ever-evolving system and to remain adaptative.
Martin’s style, which blends academic writing and casual anecdotes, makes the book particularly suitable for a broader audience. Economy novices will enjoy Martin’s dedication to revisiting classic economic theory, while economy scholars will appreciate his layered approach that combines both high-level observations and detailed illustrations. Ultimately, Martin’s proposed solution to macroeconomic and systemic problems seems tangible because they mostly rely on shifting behaviors at the microeconomic level and our perspective on the economic model. That said, Martin fails to address that his solution depends largely on the rationality and —to an extent— compassionate nature of his fellow business strategists and citizens, especially when he urges them to pay higher wages to employees or to create long-term strategies for business and overlook short-term profit. Fundamentally, Martin’s solutions imply that Americans are willing to share the economic output to create a more just, resilient, and equal society when the reality is much more complex.
Moreover, a majority of the measures and solutions Martin proposes ultimately fall into what most political science scholars or fellow economists would call a regulatory economy agenda, implying the intervention of a government that sees beyond short-term economic growth and has the means to limit the damage caused by the unbridled pursuit of economic efficiency by corporations. Readers familiar with regulatory economy principles are already inclined to use it to preserve the American economic system might find Martin’s decision to describe interventionism mechanisms without ever calling them that dubious. On the other hand, one might argue that the author’s decision to highlight the solutions exclusively through economic reasoning will help convince more readers to act, especially the ones with a political bias. Yet, the book’s demonstration feels slightly incomplete when its proposed solutions are not labeled for what they are: economic interventionism and endeavors that are typically associated with left-leaning political agenda and policies. Once the need for more regulation and a human approach to economics is demonstrated, how does one convince a broader group of Americans to vote and advocate for them, especially in a country where they are often vilified? While Martin’s work offers a great start to address the question, readers should also keep in mind the book’s premise and its limitations—namely, that democratic capitalism as observed in the US in the early twentieth century is the best politico-economic system there ever was.