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How Markets Fail
Book

How Markets Fail

The Logic of Economic Calamities

FSG, 2009 plus...


Editorial Rating

8

Recommendation

Adam Smith laid the intellectual foundation for free enterprise in his widely hailed 1776 book, The Wealth of Nations, but he also supported tight regulation of banks to suppress speculation and stabilize credit, a message most modern-day free market advocates have overlooked. Journalist John Cassidy’s thorough review of the events leading up to the 2008 financial crisis underscores how strict application of “utopian economics” can lead to disaster. He makes a strong argument for incorporating “reality economics” into the US’s supervision of the financial system. getAbstract recommends this weighty book to readers with a background in finance and to those interested in how free markets can coexist – and stabilize – with judicious government oversight.

Take-Aways

  • The boom-and-bust financial sector of the economy defies the theories of free markets and market equilibrium.
  • Recent events challenge the belief that unrestricted markets tend toward stability.
  • Economist Adam Smith extolled free enterprise but encouraged bank regulation.

About the Author

John Cassidy is a British-American journalist and author. He writes for The New Yorker and contributes to The New York Review of Books. He is the author of Dot.con: How America Lost Its Mind and Money in the Internet Era.


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