The Puzzle
The United States carries more than $40.5 trillion of debt. Neither party has the appetite to address it. Yet adjusted for inflation, real interest rates remain subdued. While nominal yields are near multi-decade highs, real yields are modest. The US 10-year yield is a little below 4.95% now, and US CPI was 3.7% in September.
Scarcity cannot explain this. There is too much capital chasing too few outlets, and that is the argument of Surplus. The S&P 500 could fund the entire $5.2 trillion AI build-out with about 2.5 years of profits. Buybacks happen not because senior executives are generous; US corporations are now net lenders. Return the hot potato, the surplus capital to investors. Let them figure out what to do with it.
Politics and Economics Rejoined
Harold Lasswell, a founder of modern political science, defined politics as "who gets what, when and how." To the modern ear that sounds like economics.
It should. The book belongs to a tradition that treats the two as inseparable. Economics is not a value-neutral metric standing above politics. It is value-laden and grounded in society.
My book offers an accessible reframing of both.
Three Economies, One Condition
Agricultural surplus made industrialization possible. Industrial surplus made possible the surplus of capital itself.
Most observers treat surplus as a special case: state planning in China, or overcapacity in steel and autos. But it is the general condition, I argue. Capitalism has become victim of its own successes.
The American surplus, along with the portion of the world's excess savings that US firms manage, flows into financial markets liberated since the 1980s. Japan has exported its surplus for decades, less as goods than as savings. China reinvests its surplus in industrial capacity and exports goods.
Three economies, three channels, one phenomenon.
Beyond Scarcity
Capitalism creates values and interests, not only goods and services. Think of Abraham Maslow's hierarchy of needs. After decades of relative peace and prosperity across North America, Europe, and much of Asia, the basic needs of many are met. Other needs and interests have emerged.
National security, the environment, and social justice have grown more salient. They challenge the primacy we have given economic values for a couple of generations.
Freedom and Equality
My deepest interest is freedom and equality.
I return to the classic meaning of freedom that inspired the American founders: the right to participate in shaping the community in which one lives. In recent decades it has been narrowed to liberty, which means property rights.
I tested this at New York University's Center for Global Affairs, where I taught for many years. I asked students to imagine that the government decided tomorrow there were too many breakfast cereals, and that from now on there would be three: one that gets soggy in milk, one that does not, and a healthy granola. How many would feel less free?
Every semester, an overwhelming majority said they would.
Freedom had become the menu. Choice among goods is mistaken for self-determination.
An Old Conversation
I am continuing another dialogue that began long ago, with Keynes's The End of Laissez-Faire (1926) and Peter Drucker's The End of Economic Man (1939). Neither granted capital special powers. It was a factor of production, subject to the same forces as any other.
The End of Economic Primacy, the book's subtitle, takes the next step. Capital has reached the point other goods and services reached: diminishing marginal utility. When there is enough, the next unit is worth less, and the next less again.
Drucker showed how economic despair feeds authoritarianism. I worry that the pendulum swung so far toward liberty that it undermined equality. A profound sense of unfairness now cuts across demographics, income levels, and national frontiers.
Surplus is published by Prometheus today, Election Day. It is not coincidental. The election itself speaks to a critical theme of the book: The top 100 American's share of federal election spending has risen from 0.25% in 2000 to 7.5% in 2024.
The Question Surplus Asks
For three centuries, economics asked how to produce more. It was the right question while scarcity ruled. Keynes anticipated the "economic problem"(scarcity) would be solved by 2030. We have conquered scarcity ahead of schedule, as it were. Now what?
We can produce more than the arrangements built to distribute it can absorb. The surplus is not the problem. It is the evidence that the old question is spent.
A society that can make everything but cannot say what it is for will fill the silence with the only language it has left: price. That is how a breakfast aisle comes to stand for freedom.
The new question is political, as it always was. Who belongs? Who is us? What does membership guarantee? What can we give each other when there is enough?
We are not short of capital. We are short of answers. Surplus is the history of how we got here, and the argument for what comes next.
We either find a new synthesis of freedom and equality, or we will surely face the demons Drucker saw.
Order today: https://www.globepequot.com/9781493096657/surplus/
Reviewed by Marc Chandler
on
November 03, 2026
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