We warned readers several months ago to expect an onslaught of books talking of the evils of the free markets and (fallaciously) talking up Behavioral economics as the mutually exclusive counterpoint. So we can’t help feeling somewhat vindicated by the fact that How Markets Fail, by John Cassidy, does just this.
In all fairness, Cassidy does believe that the markets tend to work well, only that they fall far short of what is needed. Of course, he then neglects to explain what exactly is needed, and how much and by whom, but rather talks of the evils of “the market” when it comes to the environment, healthcare, CEO salaries, etc. He seems to forget that the market is comprised of individual players and is not a big monster operating willy nilly (although many would agree with his point of view over ours).
We do give him special mention, however, due to his analysis on Adam Smith’s “Wealth of Nations”. Few, if any, economists, let alone columnists writing about economics, have actually read the WoN and are able to address Smith’s views (such as how he stated banks should not make loans to speculators). For those of you interested in the history of economics, we recommend reading the first part of this book. The rest regurgitates much of the same dribble we’ve been hearing and will no doubt continue to hear.
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