My review of "Reinventing the Bazaar: A Natural History of Markets" by John McMillan. 4*. Thanks for the recommendation @DianeCoyle1859 /
goodreads.com/review/show/26…
goodreads.com/review/show/26…
@DianeCoyle1859 "When non-economists want to dismiss an economic approach to a specific problem, they often say that "economists have a blind faith in markets".
To economists, this always sounded as a very strange claim. /
To economists, this always sounded as a very strange claim. /
@DianeCoyle1859 After all, take any intermediate textbook in microeconomics, and you will find that a very significant part is dedicated to the analysis of "market failures" and what policy should do about it. /
@DianeCoyle1859 McMillan summarizes how most independent economists "really" think about markets: as powerful mechanism for decentralized decision making, that provide strong incentives for people to exploit local and specialized knowledge. However, /
@DianeCoyle1859 McMillan also points out there are also numerous reasons why markets can "fail" and that market can unravel when the correct side conditions are not in place, and that those side conditions are often set by... the government./
@DianeCoyle1859 The question is not a "market versus government" dichotomy, but about ensuring that governments set the right context for the markets to function well.
