How Markets Fail: The Logic of Economic Calamities

By John Cassidy
Read by Ralph Cosham

13.27 Hours 11/17/2009 unabridged
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Behind the alarming financial headlines is a little-known story of bad ideas. For over fifty years, economists have been developing elegant theories of how markets work. What about when markets don’t work? What about when they lead to stock-market bubbles, glaring inequality, polluted rivers, real-estate crashes, and credit crunches? 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 consequences. 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 economic theory, including behavioral economics, for a new, enlightening view of our volatile global economy.

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Summary

Summary

A 2010 Pulitzer Prize Finalist

A 2010 Helen Bernstein Book Award for Excellence in Journalism Finalist

Behind the alarming financial headlines is a little-known story of bad ideas. For over fifty years, economists have been developing elegant theories of how markets work. What about when markets don’t work? What about when they lead to stock-market bubbles, glaring inequality, polluted rivers, real-estate crashes, and credit crunches?

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 consequences. 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 economic theory, including behavioral economics, for a new, enlightening view of our volatile global economy.

Editorial Reviews

Editorial Reviews

“Brilliant.” New York Times Book Review
“[How Markets Fail] brilliantly dissects much of what has passed for economic wisdom, and decries the lack of humility from those whose theories helped cause the disaster.” New York Times
“[How Markets Fail] is more 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 mostly succeeds.” Economist
“The last major attempt of 2009 to make sense of what has become of the discipline of economics.” Financial Times (Best Books of the Year)  
“Highly readable...Cassidy offers a clear and occasionally colorful exposition of the evolution of relevant economic thought in a way that is accessible to non-economists.” Foreign Affairs
“An ambitious, nuanced work that brings ideas alive...Cassidy makes a compelling case that a return to hands-off economics would be a disaster.” BusinessWeek
“An essential, grittily intellectual, yet compelling guide to the financial debacle of 2009.” London Evening Standard
“Fascinating and important.” Slate
“A well constructed, thoughtful, and cogent account of how capitalism evolved to its current form.” Daily Telegraph
“Market disasters—and the cycle of delusions responsible—receive lively, engaging analysis by Cassidy…Both a narrative and a call to arms, the book provides an intellectual and historical context for the string of denial and bad decisions that led to the disastrous ‘illusion of harmony,’ the lure of real estate and the Great Crunch of 2008. Using psychology and behavioral economics, Cassidy presents an excellent argument that the market is not in fact self-correcting, and that only a return to reality-based economics—and a reform-minded move to shove Wall Street in that direction—can pull us out of the mess in which we’ve found ourselves.” Publishers Weekly
“Cassidy delivers on the promise of his title, but he also offers a clear-eyed look at economic thinking over the last three centuries, from Adam Smith to Ben Bernanke, and shows how the major theories have played out in practice, often not well...Cassidy writes with terrific clarity and a finely tuned sense of moral outrage, yielding a superb book.” Kirkus Reviews (starred review)

Reviews

Reviews

Author

Author Bio: John Cassidy

John Cassidy is a journalist at the New Yorker and a contributor to the New York Review of Books. He is the author of Dot.con: The Greatest Story Ever Sold. He lives in New York City.

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Details

Details

Available Formats : Digital Download, Digital Rental, CD, MP3 CD
Category: Nonfiction/Business & Economics
Runtime: 13.27
Audience: Adult
Language: English