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How markets fail an anatomy of irrationality broch how markets fail an anatomy of irrationality John Cassidy Auteur Des milliers de livres avec la livraison chez vous en jour ou en magasin avec % de rduction How Markets Fail The Logic of Economic In How Markets Fail John Cassidy describes the rising influence of utopian economies?the thinking that is blind to how real people act and that denies the many ways an unregulated free market can bring on disaster How Markets Fail The Logic of Economic In How Markets Fail John Cassidy describes the rising influence of what he calls utopian economics thinking that is blind to how real people act and that denies the many ways an unregulated free market can produce disastrous unintended conseuences He then looks to the leading edge of economic theory including behavioral economics to offer a new understanding of the economy one PDF How Markets Fail The Logic of Economic 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 How Markets Fail The Logic of Economic In How Markets Fail Cassidy describes the influence utopian economics thinking that is blind to how real people act and that denies the ways an unregulated free market can produce disastrous unintended conseuences Oil price spikes CEO greed cycles and boom and bust waves are the inevitable outcome of self serving behavior in a modern market setting Cassidy looks to the leading edge of How Markets Fail The Logic Of Economic In How Markets Fail the Logic of Economic Calamities the author John Cassidy details the growth of the free market ideology This ideology he argues has become an over idealized utopian notion of a self regulating market has been expanded upon over decades to become common rhetoric that influenced policy This driving theory became accepted into global but specifically the American How Markets Fail the Logic of Economic Calamities How Markets Fail Positive Negative Externalities None How Markets Fail The Logic of Economic Poor People's Movements Why They Succeed How They Fail O o so ffl r ra MOVE MENTS m m WHY THEY SUCCEED HOW THEY FAIL H cr AAE VIM AGE FRANCE MB Read Bargaining and Markets Economic Theory Econometrics and Mathematical Economics MB Read The Logic of Knowing Roderick M Chisholm The Journal of Philosophy Vol No Market failure Wikipedia Some markets can fail due to the nature of their exchange Markets may have significant transaction costs agency problems or informational asymmetry Such incomplete markets may result in economic inefficiency but also a possibility of improving efficiency through market legal and regulatory remedies how markets fail an anatomy of irrationality broch how markets fail an anatomy of irrationality John Cassidy Auteur Des milliers de livres avec la livraison chez vous en jour ou en magasin avec % de rduction PDF How Markets Fail The Logic of Economic He gives us the big picture behind the financial headlines tracing the rise and fa What a great rea

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How Markets Fail The Economics of Rational Irrationality

Ll 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 How Markets Fail The Logic of Economic In How Markets Fail John Cassidy describes the rising influence of what he calls utopian economics thinking that is blind to how real people act and that denies the many ways an unregulated free market can produce disastrous unintended conseuences He then looks to the leading edge of economic theory including behavioral economics to offer a new understanding of the economy one How Markets Fail The Logic of Economic In How Markets Fail John Cassidy describes the rising influence of utopian economies?the thinking that is blind to how real people act and that denies the many ways an unregulated free market can bring on disaster How Markets Fail The Logic of Economic In How Markets Fail Cassidy describes the influence utopian economics thinking that is blind to how real people act and that denies the ways an unregulated free market can produce disastrous unintended conseuences Oil price spikes CEO greed cycles and boom and bust waves are the inevitable outcome of self serving behavior in a modern market setting Cassidy looks to the leading edge of How Markets Fail the Logic of Economic Calamities How Markets Fail The Logic Of Economic In How Markets Fail the Logic of Economic Calamities the author John Cassidy details the growth of the free market ideology This ideology he argues has become an over idealized utopian notion of a self regulating market has been expanded upon over decades to become common rhetoric that influenced policy This driving theory became accepted into global but specifically the American How Markets Fail Positive Negative Externalities None How Markets Fail The Logic of Economic Poor People's Movements Why They Succeed How They Fail O o so ffl r ra MOVE MENTS m m WHY THEY SUCCEED HOW THEY FAIL H cr AAE VIM AGE FRANCE MB Read Bargaining and Markets Economic Theory Econometrics and Mathematical Economics MB Read The Logic of Knowing Roderick M Chisholm The Journal of Philosophy Vol No Market failure Wikipedia Some markets can fail due to the nature of their exchange Markets may have significant transaction costs agency problems or informational asymmetry Such incomplete markets may result in economic inefficiency but also a possibility of improving efficiency through market legal and regulatory remedies ‎How Markets Fail on Apple Podcasts Matt Chuck and Brian talk with Mike Parkott about his experience in farming in the era of COVID Direct to customer farming large scale agriculture and the financial health of How Markets Fail The Logic of Economic In How Markets Fail John Cassidy describes the rising influence of utopian economies the thinking that is blind to how real people act and that denies the many ways an unregulated free market can bring on disaster Combining on the ground reporting and clear explanations of economic theories Cassidy warns that in today's economic crisis following old orthodoxies isn't just misguided it How Markets Fail John Cass This is another Dot.Homme pragmatic reality based way of thinking How Markets Fail The Logic of Economic In How Markets Fail John Cassidy describes the rising influence of what he calls utopian economics thinking that is blind to how real The West (3rd Edition) people act and that denies the many ways an unregulated free market can The Maddest Idea (Revolution at Sea produce disastrous unintended conseuences He then looks to the leading edge of economic theory including behavioral economics to offer a new understanding of the economy one How Markets Fail The Logic of Economic In How Markets Fail John Cassidy describes the rising influence of utopian economies?the thinking that is blind to how real The Ultimate Guide to Trail Running people act and that denies the many ways an unregulated free market can bring on disaster How Markets Fail The Logic of Economic In How Markets Fail Cassidy describes the influence utopian economics thinking that is blind to how real A Biggles Omnibus people act and that denies the ways an unregulated free market can The Power of Soft produce disastrous unintended conseuences Oil Moscow, December 25, 1991 price spikes CEO greed cycles and boom and bust waves are the inevitable outcome of self serving behavior in a modern market setting Cassidy looks to the leading edge of How Markets Fail the Logic of Economic Calamities How Markets Fail The Logic Of Economic In How Markets Fail the Logic of Economic Calamities the author John Cassidy details the growth of the free market ideology This ideology he argues has become an over idealized utopian notion of a self regulating market has been expanded upon over decades to become common rhetoric that influenced Planetary Forces, Alchemy and Healing policy This driving theory became accepted into global but specifically the American How Markets Fail Positive Negative Externalities None How Markets Fail The Logic of Economic Poor People's Movements Why They Succeed How They Fail O o so ffl r ra MOVE MENTS m m WHY THEY SUCCEED HOW THEY FAIL H cr AAE VIM AGE FRANCE MB Read Bargaining and Markets Economic Theory Econometrics and Mathematical Economics MB Read The Logic of Knowing Roderick M Chisholm The Journal of Philosophy Vol No Market failure Wikipedia Some markets can fail due to the nature of their exchange Markets may have significant transaction costs agency The Shepherds Bush Murders problems or informational asymmetry Such incomplete markets may result in economic inefficiency but also a Red Centre (Alpha Force, possibility of improving efficiency through market legal and regulatory remedies ‎How Markets Fail on Apple Podcasts Matt Chuck and Brian talk with Mike Parkott about his experience in farming in the era of COVID Direct to customer farming large scale agriculture and the financial health of How Markets Fail The Logic of Economic In How Markets Fail John Cassidy describes the rising influence of utopian economies the thinking that is blind to how real Midnight Storm (The Warriors, people act and that denies the many ways an unregulated free market can bring on disaster Combining on the ground reporting and clear explanations of economic theories Cassidy warns that in today's economic crisis following old orthodoxies isn't just misguided it How Markets Fail John Cass This is another

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Idy How Markets Fail offers a new enlightening way to understand the force of the irrational in our volatile global economy Why do many people contribute generously to charity but fail to save for their own retirement? What is the economic answer to global warming? Using fascinating new insights from behavioural economics and vivid contemporary and historical examples Cassidy explains that How Markets Fail The Logic of Economic Poor People's Movements Why They Succeed How They Fail O o so ffl r ra MOVE MENTS m m WHY THEY SUCCEED HOW THEY FAIL H cr AAE VIM AGE FRANCE MB Read Bargaining and Markets Economic Theory Econometrics and Mathematical Economics MB Read The Logic of Knowing Roderick M Chisholm The Journal of Philosophy Vol No How Markets Fail uotes by John Cassidy Market prices will fail to approximate true scarcity values in terms of wants; they will be loaded with misinformation and producers’ profit calculations will leave out of account much of the private benefit associated with public goods The ‘invisible hand’ will fumble people’s decentralized market choices will not efficiently cater to their tastes” ― John Cassidy How Markets How Markets Fail The Logic of Economic Finalist How Markets Fail The Logic of Economic Calamities by John Cassidy Farrar Straus and Giroux Share Twitter Facebook Email A work that probes the complexity of the Great Recession using solid research and precise documentation to reveal not only a gripping human drama but also a tense clash of ideas Winners Prize Winner in General Nonfiction in The Dead Hand The Untold Summary and reviews of How Markets Fail by John In How Markets Fail John Cassidy describes the rising influence of what he calls utopian economics thinking that is blind to how real people act and that denies the many ways an unregulated free market can produce disastrous unintended conseuences He then looks to the leading edge of economic theory including behavioral economics to offer a new understanding of the economy one How Markets Fail The Logic of Economic “How Markets Fail is than just an account of the failures of regulators and the self deception of bankers and homebuyers although these are well covered For Mr Cassidy the deeper roots of the crisis lie in the enduring appeal of an idea that society is always best served when individuals are left to pursue their self interest in free markets An ambitious book and one that How Markets Fail Summary and Analysis like Sites like SparkNotes with a How Markets Fail study guide or cliff notes Also includes sites with a short overview synopsis book report or summary of John Cassidy’s How Markets Fail We found no such entries for this book title Please see the supplementary resources provided below for other helpful content related to this book Short Book Summaries Sites with a short overview synopsis Market Failure Economics Help Definition of Market Failure – This occurs when there is an inefficient allocation of resources in a free marketMarket failure can occur due to a variety of reasons such as monopoly higher prices and less output negative externalities over consumed and costs to third party and public goods usually not provided in a free marke This is a politi


10 thoughts on “How Markets Fail The Economics of Rational Irrationality

  1. says:

    This is a timely lucid well structured and well argued book perhaps the best of the half dozen or so economically and financially themed tomes that I have read over the past several months Cassidy by structuring his work into three distinct parts opted for what in my opinion served best to channel the disparate and historically deep but uite relevantly interrelated streams of analysis he has undertaken within The crux of the entirety is the economic crisis of 2008 an example of drastic market failure whose development and repair were occluded and eluded by the systems of the dominant economic paradigm of the past three decades—what the author has labelled Utopian Economics The timeframe causality and effect of this post millennial crunch comes last amongst the book's tripartite ordering; an ideal positioning as it allows Cassidy to first trace the evolution of the twentieth century Classical offshoots into this dominant Utopian school; and then undertake to deliver a similar process for the parallel theoretical development—primarily but not exclusively Neo Keynesian—that the author believes to represent the antithesis to the first named Reality Based EconomicsCassidy places the first part's economic maturation into the utopian camp for a number of reasons— in toto the way in which it sought a unification of the macro and micro divisions of the economic whole by embracing what were in their origin abstract academic formulations and theories stretching and spreading them through the application of complex and elegant mathematics such that they were presented as tested and ready for adoption within the real world Impressive in their postulations of self regulating and efficient markets that existed in euilibrium and rational human actors possessed of a perfect knowledge of prices and information as they operated within the latter in the author's determination they elevated free market economics to the plane of the absolute completely disregarding all of the messy—and enduring—human irrationalities foibles and impulsiveness that flavored a world marching ever forward into an uncertain and ultimately unknowable future What's the author takes pains to illustrate that these Post Classical utopian adepts saw the inherently infallible invisible hand of the market at work in specific markets and situations where its original formulators—Adam Smith David Ricardo John Stuart Mill—had explicitly not; had elided from their calculations all that those past masters had cautioned about the potencies and potentialities within that incorporeal extremityCassidy's presentation of this particular field of economic thought—increasingly dominant following the one two counterpunching combination of Seventies' stagflation and Eighties' Communist collapse—struck me as being for the most part even handed and well informed outlining and acknowledging both its successes and its attractive ualities even as he endeavored to elucidate its growing detachment from the actual existing world in which we live and function However a coherent and consensus bound system stands formidably against an opposition riven into different and differing outposts of dissenting thought; and such was the case for Utopian Economics as we headed into the new centuryThese increasingly thinly spread pools of countervailing economic thought are mostly recounted as they formed in the decades after the Second World War All serve in some manner as cautionary philosophies and theories often derived from psychological considerations set against a recurrence of those terrible failures of the first half of that century the Great Depression massive unemployment vast wealth destruction and the tendency for financial markets to blow speculative bubbles This material was excellent and informative throughout with its primary focus upon Keynes' rational irrationality game theory—in especial the Prisoner's Dilemma— disaster myopia and Minsky's arguments about Ponzi Finance and his belief that stability is destabilizing In their own fashion and with considerable interlinking and cross fertilization they explore all of the myriad ways in which markets are not in fact perfectly efficient and self clearing; their human participants far from perfectly endowed with information from past present and future to allow them to make überrational calculations Instead they attempt to determine how incentives become skewed the public good harmed by individual rationality markets distorted and such distortions obscured from market actors and financial innovation endowed with extensive destructive capabilities by the various irrationalities unknowability opacities and systemic entropic tendencies that are inevitably brought to bear upon any capitalist systemIn essence Cassidy reveals these various economic workings from the second section as being constructed from a realistic point of view endeavoring to understand how our intricate economic systems operate—and us humans with all of our human frailties within them—in the existing world to set them in contrast against those from the first that—their impressive results in certain areas and aesthetically elegant formulations notwithstanding—have chosen to examine markets and their actors as they might be in a perfect world as test subjects operating in an isolated setting in which all of the parameters have been predetermined and brought accurately into the euations It's a decidedly curious state of affairs this utopian leaning amongst the Monetarists and Neo Classicals seeing as how their proponents have ranked amongst the most committed anti communists those most opposed to the utopian longings at work in the far left To decry the claim to perfection by an opposing ideological viewpoint while setting up one's own doctrinal Eden can't help but take on the hue of absurdity; but in the author's presentation that is exactly what took place when a space was opened up by the Keynesian failures of the final uarter of the twentieth centuryWith all of this said Cassidy saves his best for last the third section a detailed and brilliantly delineated exploration of the lead up development and unfolding of the Crash of 2008 is the best such presentation I have read so far Endeavoring at all stages to link the events taking place with the theories and systems detailed in the first two sections using them as explicatory devices for what was transpiring it brought the entirety into focus with a clarity that both was appreciated and served to persuasively highlight the applicability of his previously generated thematic structure As Cassidy points out the Utopian economists really do seem to be constructing their arguments based upon an academic textbook understanding of the economy there is little in their calculations that takes into account modern networked systems and technologies; the evolution of financial instruments; the growth of the financial sector as set against the manufacturing and industrial components; the proliferation of monopolies and oligarchies in a vast globalized corporate environment; and the massive expansion of credit together with the loosening of lending standardsAs I've stated in prior reviews I'm far from being any sort of economic expert but on the basis of what I have come to understand you can colour me convinced By nature I find myself inclined to align with those systems that appear to most take into account the workings of reality to ground themselves in commonsense in what they claim to apprehend; and for the most part that puts me in the camp of those who embrace Reality Based Economics I know that there are proponents of the Austrian School who aver that their system is actually the one most cognizant of reality but I simply do not know enough about it sufficient to judge that claim whilst simultaneously maintaining from that which I have ingested a certain skepticism towards it; but if one of them could produce a book as excellently constructed superbly written and convincingly argued as Cassidy's outstanding effort perhaps I just might find myself coming around


  2. says:

    What a great read this has been for me Some chapters are interesting than others for me but this book has changed how I view economics and increased my interest in the subject Highly recommended


  3. says:

    The 2007 and 2008 crisis in world economics and financial markets have spawned many books This is one book that talks about the same crisis but perhaps in a much insightful way than any other Dwelling on the interplay between economic policies and financial markets this book is difficult to put down once you realise the enormous promise it holds when you read the 12 pages of the 'Introduction' chapter That promise is not belied although John Cassidy the author could have been clearer and elaborate in the solutions he offersCassidy refers to the idea that a free market economy is sturdy and well grounded as an illusion of stability He calls this Utopian economics This forms the first of three parts of his book and includes eight fascinating chapters on the people and ideas that shaped itThis section of the book first lays out in great detail how economic theories and economists came about to have a large sphere of influence in central banks' monetary policy matters and governments' economic policies It describes how the Chicago School of economics propagating free market economy with almost zero regulations ended up enormously broadening their sphere of influence in the top echelons of the US Federal Reserve and the Treasury department of the US government What follows is an excellent exposition of 10 12 most influential economists including Adam Smith John Keynes Milton Friedman Robert Lucas and Friedrich Von Hayek as well as a couple of mathematicians such as Eugene FamaTaking the reader back and forth in time Cassidy beautifully connects the conservative economists with the neo liberalists mathematics with economics and evangelist led economic theories with existing practices in financial markets and governmental regulationsThe second part of Cassidy's book has him propagating reality based economics Cassidy believes that free market economists dangerously ignore the very possibility of speculative bubbles leave alone the fact that market prices during a speculative bubble provide incentives for individuals and companies to act in ways that are individually rational but immensely damaging to themselves and others He even gives examples of market failures beyond financial markets such as markets encouraging power companies to despoil the environment and cause global warming health insurers excluding sick people from coverage and CEOs stuffing their own pockets at the expense of their stockholdersThe second part is as elaborate articulate and insightful as the first Cassidy puts forth the economics linked issues of the prisoner's dilemma the market for lemons the beauty contest the rational herd and ponzi finance Like in the first part Cassidy beautifully uses the works of important contributors to economics to illustrate their and his own arguments For instance on the subject of market externalities Cassidy talks about a paper presented at Harvard University in the mid 1980s by W Brian Arthur a applied mathematician from Northern Ireland wherein Arthur argued that chance events and network effects can enable inferior technologies to beat out superior products and take over entire marketsCassidy however fails to convince why monopolies should be forced to co operate with budding competitors He talks about Microsoft refusing to make its products compatible with those of its rivals but does not rationalise why that is such a good thing in a competitive scenario and how much of sustainable benefits it will provide to consumersIn the third and last part of the book Cassidy turns to the real life happenings in financial markets and economies in the last 20 30 years and how they led to the complete financial meltdown in 2007 and 2008 This is again a very exciting read as Cassidy elaborately criticises Alan Greenspan's blind eye to the speculative bubbles in the real estate market fanatic reduction of interest rates to artificially pump up the economy after the 'dot com' bust in 1999 2000 and dangerously preventing regulators such as Commodity Futures Trading Commission from laying out capital adeuacy and risk containment measures for complex financial products like credit default swaps and other complex financial derivativesCassidy lays out in good detail the history of mortgages including the sub prime chain and the bubble in real estate prices There are rare insights into how the securitisation of mortgages by banks and Wall Street firms grew in size and led to extreme risks that ultimately exploded in the face of every financial market participant He also points to the failure of capitalism in that tax payers money had to be used to bail out the failures in the marketWhile Cassidy is great in describing what happened he is very weak in pointing out appropriate solutions in much detail He does however says that free markets should not be devoid of active government intervention when prices are going up and building into a bubble But Cassidy should have been sharp and pointed out that if firms get too big to fail then they should be too big to succeed in the first place Or if free markets are to be allowed without restrictions then any failures should also be allowed to happen freely without government bailouts If profits are made by everyone during a bubble then losses can also be borne by everyone when the bubble burstsHe also fails to highlight enough the dangers of uncontrolled leverage in not just financial derivatives but also in complex financial structured products whether traded directly between counterparties or traded on a financial exchangeBut on the whole the book is a great read


  4. says:

    “How Markets Fail” or what I learned whilst getting my economics degree While billed as an explanatory review of the ongoing economic correction that began when the housing bubble began to seriously leak in 2006 John Cassidy’s book can be better understood as a somewhat in depth treatise of economic thought from the late 1700’s to the day Bear Sterns died Cassidy spends much of the book trotting out graduate school level depictions of all the economic biggies from Adam Smith to John Maynard Keynes to Alan Greenspan After the opening sections of the book spent straight forwardly introducing the luminaries there is a long section where the author beats up on the ”let it be” Greenspan To some degree Cassidy rightly takes The Maestro who learned laissez faire economics at the feet of Ayn Rand to task for failing to realize Smith’s ”invisible hand” of the market was effectively tied because market correcting mechanisms had become corrupted In particularly the credit rating agencies who would have tempered the excesses in another time were simply selling AAA designations Standard Poor’s et al were hardly alone in jumping on the Titanic and it is this herding instinct that has and will continue to create massive bubbles unchecked in poorly regulated markets The book does a good job of name checking far better authors that you should read instead – Dan Ariely Nassim Taleb and particularly Kahneman and Tversky Kahneman's latest book Thinking Fast and Slow presents a far authoritative review of this material Cassidy ends the book with the housing crash which crushed Lehman Bear and Merrill largely from research mostly pulled from the Wall Street Journal A number of other books in particular Bethany McLean's All the Devils are Here The Hidden History of the Financial Crisis present a far gripping tale of this same material Cassidy's writing style suggests an academic leaning but he does not drift into excessively arcane language and keeps things relatively clear The text is generally dry and the author doesn't invest it with a lot of emotion save for the sections attacking Greenspan whom he apparently feels betrayed by In short a good journeyman's review of ancient and modern economics but one eclipsed by other authors in this space


  5. says:

    This is another excellent addition to a library of very good books that came about after the official end of free market capitalism on 91808The mathematics of economics are the most surprising part at the beginning of this book and you get the sense that John Cassidy introduces them to show he's serious; he's read the texts he's examined the models; he has a much better grasp on the subject than the average CNBC viewerHis basic thesis is that the last 30 of years economics have been a waste The entire discipline has been interested in the elegance of its models than the accuracy of their predictions Market fundamentalists those zealots who worship Smith's invisible hand and Friedman's monetarism and Greenspan's certainty that everything will just be fine once we rid ourselves of the regulators treat the catastrophic circumstances of September 2008 as a mere anomaly and they have models to prove it But what good is a model that fails at the very moment it is needed most?That is the rhetorical uestion that Cassidy's book asks over and again Don't take my word for it Here's part of the last page of How Markets FailNote the phrase 'the efficiency properties of market outcomes' What do you suppose that refers to? Builders constructing homes for which there is no demand? Mortgage lenders foisting costly subprime loans on little old ladies of limited education? Wall Street banks leveraging up their euity capital by thirty or forty to one? The global economy entering its steepest downturn since the 1930s? Of course not What Mankiw Harvard professor of economics was referring to was the textbook economics that he an others have been teaching for decades the economics of Adam Smith Leon Walras and Milton Friedman In the world of utopian economics the latest crisis of capitalism is always a blipThis book works because it goes right at the sacrosanct models for which Nobel prizes have been foolishly awarded It makes combat with the economists according to their own rules of engagement Then it beats the hell out of them


  6. says:

    A pleasant academic book to read If there is a second name for this book it will be how “free” markets failI particularly like the first two parts of the book They effectively revise and summarize all of the key economic theories that we’ve learnt during university Actually the content is than just a general revision it allows me to connect bits and pieces of knowledge together to form a solidified understanding on the economics foundationUnfortunately by the time I had the chance to read this book it has already been published for 11 years since the first edition so most of ‘Part III’ has become common knowledge However this is still an excellent book as its overall content remains to be relevant in today’s times despite being published for uite a while


  7. says:

    “Few ideas offer appeal than a model that is simple elegant and wrong” John Cassidy uotes Ben Friedman the Professor of Political Economy at Harvard University towards the end of the book How Markets Fail is a book on the history of economic thought with the book divided into three sections – Conservative Economics Keynesian and Neo Keynesian Economics which Cassidy calls Reality Based economics and the Financial Crisis Cassidy goes to great lengths to show the disconnect that exists between the complex mathematics used to predict the future of the economies and how the economies and the markets actually operate Using the events leading up to the Great Recession of 2007 08 and the steps that were taken in the aftermath of the financial crisis Cassidy reasons that the assumptions which act as pillars for the laws of Free Market economics don’t hold at all times especially not at times of crisis and argues for greater regulation and oversight and less dependence on the laissez faire principles of markets being able to correct themselvesThis book took me eighteen months to read and I was able to finish an MBA in that time period Although written for the average person interested in economics Cassidy is no economist himself several complex concepts Hayek’s price signaling Negative Externalities Prisoner’s dilemma and Rational Irrationality are discussed in the book with a fair amount of depth Without going into the mathematical details of the concepts Cassidy is able to present the big picture view of the ideas and how they manifest in the different schools of thought Cassidy’s personal views on fiscal policies and market operations are all too visible in the narrative and his scathing comments Alan Greenspan and Ben Bernanke are well visible However it would be unfair to say that the views portrayed in the book are one sided as counterpoints are presented uite freuently Cassidy’s core argument is just that – there is no one answer to how the markets operate and how they need to be monitored there is no one theory which should say whether everything is okay He advocates a case by case monitoring of financial situations and greater emphasis on financial stabilityHow Markets Fail was an excellent read and is highly recommended to anyone interested in learning about the history of economics and how they fit into the reality of the Great Recession On a personal level this book will always be important for having kindled the love of economics in me


  8. says:

    While the book gives a broad history of economic thought and of the 2018 financial crisis it is not without serious flaws Personally I also take issues with many elements of the efficient market theory rational expectations and general euilibrium theory what the author termed utopian economics but those are not the sole justifications for the free market Most capitalists I know many are investors and entrepreneurs recognizes that the market is not always efficient Stock market prices can deviate from their value for prolonged periods of the time causing irrational bubbles and crashes Benjamin Graham's analogy of the manic depressive Mr Market Two parties on the opposite sides of the trade often have differing information or expectations that's why they entered into it in the first place that's an inherent feature of the market perhaps the real issue with information asymmetry is the problem of fraud which often can be resolved through market solutions that provide independent verification of the productservice or through contract law within the legal system for example investors who bought junk from misguiding sellers should have legal recourse to sue The price signal distortions resulting from the expansionary monetary policies by Alan Greenspan leading up to the 2008 financial crisis has been heavily criticized by many Austrian school economists in the tradition of notably FA Hayek and Mises whom the author seem to group together with Milton Friedman in the Chicago school The current debate is not over whether the market is always perfectly efficient at all times straw man argument but whether government failures would outweigh market failures Private markets and public governments operate under very different incentive structures would government solutions necessarily be superior to possible market solutions in the long run? In the context of the financial crisis were government policies part of the problem that contributed to the crash in the first place? In addition to the economic arguments a key element of governmental action often involved coercion whether those can be justified to realize a better outcome on utilitarian grounds at the expense of certain individual rights is also a subject of debate that was not addressed That said I think there are valuable contributions by the market failure literature in assessing situations where the key elements of a functional market are lacking tragedy of the commons is a good example mentioned in the book in relation to environmental policies I hope the author was balanced in addressing the market vs government debate After all there are no shortages of utopian policies by governments throughout history remember The Great Leap Forward?


  9. says:

    This is a political screed That is unfortunate The first part of the book offers Cliff Notes explanations of various economic theories It is a fair presentation if any of the ideas are new to you It is redundant if you're already familiar with the separate and competing theories The next section becomes political global warming universal healthcare environmental protection etc It becomes a full defense of Keynesian thought as currently practiced not necessarily as believed by John Maynard Keynes This part of the book becomes irritating in light of the bailouts of Wall Street Fannie Mae Freddie Mac etc and the coming trainwreck of Obamacare not to mention the current scandals at the IRS Unfortunately it seems that current events debunk the author's supposition that government involvement provides better outcomes The last third gets less political in attempting to explain the stock market and housing bubbles since the Dot com bubble The author does not support any of his positions with facts or figures This is an unsupported op ed piece


  10. says:

    I am glad I did not major in economics Four six or eight years of economics study and I would have been taught erroneous information like the efficiency of the invisible hand and euilibrium theory This book is about a major blindspot economists had the theory that the market would work all the time making everyone prosperous When the Great Recession hit this turned out to be not the case Cassidy not only gives an engaging and informed history of the that calamity but guides us through an intellectual theoretical and realistic study of modern economics Where the theories that were used and ignored leading up the Great Recession came from An explication of free market economics starting with the founder Adam Smith onwards to the 20th century with Hayek and Milton Friedman And then the revolution we all ignored in the past couple of decades the work o f JM Keynes Who is still not being listened to as nothing recently on Wall Street has changed; free market economics is still with us and we are waiting for the next disaster


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