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How Markets Fail: The Logic of Economic Calamities

by John Cassidy

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386866,209 (4.14)18
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 consequences. He then looks to the leading edge of economic theory, including behavioral economics, to offer a new understanding of the economy--one that casts aside the old assumption that people and firms make decisions purely on the basis of rational self-interest.… (more)
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English (7)  Dutch (1)  All languages (8)
Showing 1-5 of 7 (next | show all)
Cassidy is an economist by education and did a lot of research for the book. If you've already know the basics of economic history you might want to skip that part of it. However, I did and I still found his non-denominational Brief History of Economics readable because he talks about a few lesser-known figures who figure into later parts of the book as well as more recent developments such as behavioral economics.

Likewise, the basics of why markets don't always operate as hoped or expected by one economic ideology or the other is well-presented. He labels the strong free market/rational econ thinking as utopian economics and advocates for non-ideological, pragmatic approach he calls reality-based economics.

When it comes to dealing with the 2007-2008 crisis, he carefully dissects the events, policies, and actions of the various players and shows how they created the incentives that led to the speculative bubble and then let it grow to gargantuan proportions. It was no one person or entity's fault, but rather the result of many entities acting together, most informed to one degree or another by utopian economic thinking. ( )
  qaphsiel | Feb 20, 2023 |
For authors who write for the general public: brevity and presenting complex ideas in simple ways are a virtue. This author hadn't those virtues. Had to give up half way in. ( )
  lente | Dec 6, 2015 |
Excellent. Thorough overview of the field of economics, from Adam Smith through JS Mill, Keynes and Hayek, Friedman, to the current financial collapse. Argues for a pragmatic approach, with the full acknowledgment that market failure exists, and that there is no invisible hand when it comes to the financial markets. The real joy for me comes in learning all sorts of things about economists I'd not really heard anything about, such as Arrow, Akerlof, and Minsky. It predates the Occupy movement, written in 2009, and it's late enough that you can see that Wall Street didn't learn a damn thing from the recent financial crisis.
4 stars oc ( )
  starcat | Aug 11, 2014 |
Superb critical account of all that is wrong with economics and the economic system. Very clear and wide ranging. ( )
  xander_paul | Feb 4, 2014 |
sort of a history of economics (only as far as Adam Smith) - will need to interloan in the future ( )
  lindap69 | Apr 5, 2013 |
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A common reaction to extreme events is to say that they couldn't have been predicted.
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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 consequences. He then looks to the leading edge of economic theory, including behavioral economics, to offer a new understanding of the economy--one that casts aside the old assumption that people and firms make decisions purely on the basis of rational self-interest.

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