How Markets Fail: The Logic of Economic CalamitiesHow did we get to where we are? John Cassidy shows that the roots of our most recent financial failure lie not with individuals, but with an idea - the idea that markets are inherently rational. He gives us the big picture behind the financial headlines, tracing the rise and fall of free market ideology from Adam Smith to Milton Friedman and Alan Greenspan. Full of wit, sense and, above all, a deeper understanding, How Markets Fail argues for the end of 'utopian' economics, and the beginning of a pragmatic, reality-based way of thinking. |
Contents
Introduction | |
UTOPIAN ECONOMICS | |
Warnings Ignored and the Conventional Wisdom | |
Adam SmithsInvisible Hand | |
Friedrich Hayeks Telecommunications System | |
The Perfect Markets of Lausanne | |
The Mathematics of Bliss | |
The Evangelist | |
Keyness Beauty Contest | |
The Rational Herd | |
Psychology Returns to Economics | |
Hyman Minsky and Ponzi Finance | |
THEGREAT CRUNCH 17 Greenspan Shrugs 18 The Lure of Real Estate 19 The Subprime Chain | |
In the Alphabet Soup 21 A Matter of Incentives 22 London Bridge IsFalling Down 23 Socialism in Our Time | |
Conclusion | |
Notes | |
REALITYBASED ECONOMICS 9 The Prof and the Polar Bears | |
A Taxonomy ofFailure | |
The Prisoners Dilemmaand Rational Irrationality 12 Hidden Information and the Market for Lemons | |
Acknowledgments | |