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It was less than 20years ago that Daniel Yergin and Joseph Stanislaw published The Commanding Heights, which chronicled the triumph of free-market economics over socialism, communism and the idea that government had a big role to play in managing the economy. The years since, marked by financial crises, stagnant incomes, rising debt levels and persistently high unemployment, have raised doubts as to whether that great debate has been resolved. So it should be no surprise that the bookshelves are beginning to fill up with revisionist critiques of how the market fundamentalists got it all wrong.

In two of the most recent contributions, Edward Kleinbard, a respected tax expert and lawyer, and Jeff Madrick, a longtime economic journalist, set out to debunk the notion that markets can always be relied on to generate the best economic outcomes. As you might imagine, Milton Friedman comes in for a heaping helping of scorn. They also chide their fellow liberals, and liberal economists, for allowing the political debate to become so cramped by misguided fixations on deficits, moochers and job-killing taxes that much-needed regulation, redistribution and public investments are no longer seriously discussed.

Beyond that, however, the similarity between the two books ends. One (Kleinbards) is packed with powerful data, fresh insights, unassailable analysis, and a set of recommendations that are both economically and politically viable. The other (Madricks) is an infuriating and rambling rant full of straw men, oversimplification and historical blind spots that winds up being the mirror image of the ideology-masquerading-as-science that it means to expose.

The strength of We Are Better Than This comes from Kleinbards background as an academic (University of Southern California law school), tax lawyer (Cleary Gottlieb Steen & Hamilton) and congressional aide (staff director of the Joint Committee on Taxation). His lawyerly precision, thorough research and restrained conclusions provide the credible underpinnings for the moral passion discernible just below the surface. The nature of life is that we do not control it, Kleinbard writes in response to those who argue that markets generate the incomes people deserve. Both our native talents and our good fortune are distributed through processes that we cannot fathom and do not earn. Our loud proclamations that what we take from the market is our just deserts is just noise made against the darkness, trying to still the voice inside that asks, why me and not them?

Elsewhere, he draws from his experience on Wall Street in rejecting the widely held liberal belief that theres no limit on how high you can tax the rich since theyll never miss their last million. The affluent clients with whom I worked largely share the view that they sincerely loved money, that money was attracted to them because it sensed their love, that they knew how to take care of money and give it a good home, and that other less affluent individuals would horribly mistreat that money. ... If there is such a thing as the declining marginal utility of income, someone forgot to tell these folks.

Kleinbards targets are what he calls the the market triumphalists who stubbornly ignore the market failures all around us; rationalize inequality in the name of economic growth that no longer is widely shared; and undervalue the economic worth of public investments in infrastructure, education and a social safety net that nourishes our economy, our politics and our souls.

The United States has the highest poverty rate [and] the greatest . . . wealth inequality of any major developed economy in the world. Our parents incomes play a larger role in our personal economic fortunes than is true for other peer countries. Our long-term unemployment rate, once the envy of the world, has now sagged badly. Our education system is mediocre, and our healthcare is unaffordable. ... And what, in turn, have we bought in exchange for all of this? Not growth, at least over the last generation. The first refuge of the economist when this question is asked is to claim that inequality is a necessary consequence of free markets. ... This is true, but only to a point; inequality is not the nectar of the economic gods. Some is necessary, but more is not necessarily better. No other developed country is as addicted to poverty and inequality as we are, and yet somehow they prosper.

Every chapter of We Are Better Than This opens with a quote from Adam Smith, the Scottish philosopher and father of modern economics, who coined the invisible hand, and whom Kleinbard aims to rescue from his current fate as a cartoon spokesperson for selfishness, inequality and a market unrestrained by government. The effect is to expose the moral poverty of our current discourse on economic and fiscal policy.

But Kleinbard is no bleeding heart given to easy moralizing. He is at his best when he reviews the unambiguous research on the degree of cognitive impairment that results from malnutrition in pregnant mothers and infants, and juxtaposes it with the paltry savings from recent budget cuts in those programs. Or when he compares what wealthy American school districts spend per pupil ($19,000) with what the poorest spend ($7,400) an unusual policy choice that we share only with Turkey and Slovenia. Or when he marshals the most recent and reliable data to demolish the most cherished nostrum of free-marketeers: that higher taxes and bigger government strangle job creation and economic growth.

But its not just conservatives who are overly fixated on taxes. Over the past two decades, Kleinbard argues, liberals have struck a bad political bargain that accepts a steady erosion of public investment and social insurance (the safety net) in exchange for maintaining the progressivity of the tax code. The more potent element of a progressive fiscal system is how the money is spent, he shows, not how it is raised. For both political and economic reasons, he says, the better trade-off is a slightly less progressive tax system that raises more revenue to support higher levels of public investment and a more generous safety net. The secret of funding a progressive fiscal system one that actually has a measurable impact on inequality as it is experienced is not through quasi-sumptuary taxation in the form of high marginal tax rates, he writes. Instead, the secret sauce is a tax system that is only mildly progressive, or even regressive, but that is large enough to fund government investment and social insurance programs that change lives.

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We Are Better Than This Edward Kleinbard, and Seven Bad Ideas, Jeff Madrick