Wednesday, June 19, 2013

Reinventing the Bazaar: A Natural History of Markets

This Greg Mankiw recommendation is a wonderful read. Along with The New Geography of Jobs, these are the most accessible, thoughtful and even handed applications of economics I have read this year. These two books would substitute for almost all introductory textbooks in economics to the benefit of students.

Readers looking for a basic primer on how our "market economy" works will find no better treatment than this first book by Stanford University professor McMillan. Taking the long view, he examines how markets in ancient times evolved and shows how countries experimented with markets, some successfully and some not. Not surprisingly, he judges countries like Russia and China with their centralized economies as not being truly market driven, but he lauds them for recent changes. Although he does raise the flag on "free markets" a bit much, he takes a refreshingly commonsense approach to his subject, doesn't talk down to his readers, and refrains from excessive economic jargon. The Internet is praised for breaking down barriers, and he terms the eBay web site "a high-tech flea market." Government deregulation is a good thing, but California, in his opinion, made a mess of it resulting in the energy crisis of last year. The bottom line for McMillan is that "the market system is like democracy. It is the worst form of economy, except for all the others that have been tried from time to time."

“There could be no better guide to the modern view of markets than McMillan's new book.” (Joseph E. Stiglitz, 2001 Nobel Prize winner in Economics )

“Lively [and] instructive... A colorful and authoritative look at how markets work and don't work in today's economy.” (Hal R. Varian, author of Information Rules: A Strategic Guide to the Network Economy )

“Required reading for anyone who wants to understand the "magic" of markets... Lucidly explained, brilliantly analyzed, and delightfully explored.” (Reed E. Hundt, former chairman of the Federal Communications Commission )

“McMillan's rich knowledge of ... current economic theory and ... economies in transition is well embodied in this ... sophisticated survey.” (Kenneth J. Arrow, 1972 Nobel Prize winner in Economics )

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