Just in time for economic worry from politicians and the media, Eamonn Butler has come out with a book to remind us of the value and beauty of the free market. Just as people start to panic and reconsider all those daft meddling ideas that have failed in the past, he is here with a simple little book of illustration to keep things in perspective.
A bit of a primer and a basic guide, The Best Book on the Market sets things out in the simplest terms that even the densest politician can understand. The pun-tastic title is a good clue at the nature of this book.
While on a very serious subject, there is none of the po-faced writing that can be found in many books on the subject. Economists come in for a lot of stick in the book for over-complicating things and assuming life works as it does in theory.
The book is especially apt in the case of the calls for various people for surplus taxes and curbs on speculators with regard to the oil market. Its moves for a so-called "windfall tax" were voted down today in the US Senate.
The book quite rightly points out that government meddling and market manipulation is to blame for high prices rather than the other way round. Speculators take the risk so the rest of us don't have to. Bill O'Reilly and his ilk should take note of this book’s contents.
In an ideal world this book would be sent to every politician in London and Washington. It would not be remiss to send a few copies to the economics schools around the world as well. The small size of the hardcover means it would not even be hard to carry around while reading it.
Butler has succeeded in making the case for free markets in a clear, clean, and precise manner. He neither patronizes nor bores.
Article comments
1 - Emit Etsaw
The free market is fine if you want exceptional conditions like what we had in 1929 with the Great Depression. What would be better would be a market that mitigated the possibility of these extreme market conditions and rebalanced itself before an extreme condition could occur. The simplest solution to this would be to impose a small set of regulations to the effect of no corporation can monopolize a specific market. The only way that I can think of this is to provide a rule that disallows a company from exceeding a certain size. If said company does exceed a certain size, then the good or service that is being provided has become a common good or service and therefore should then become a not-for-profit or a non-profit entity or should split up. This allows for larger entities, but forces them to work for the common good as their business is no longer capable of being run well by any single person (exceptions do happen, but not the norm). This allows for the free market to run essentially unimpeded, but changes the goal of the larger companies to become for the common good rather than for greed/profits. The PUC for the utility companies did a great job regulating utilities for over 50 years until Bill Clinton relaxed the rules which allowed Enron to happen. Those utilities companies made a modest profit and were good stewards of their locations and effectively ran monopolies. The situation changed and screwed over nearly everyone in the name of free markets when not a single utility went bankrupt under the old rules and now they go bankrupt and hurt their markets, their customer, and the nation all because the modest profits werent enough.
2 - bliffle
Ultimately, free unconstrained markets result in oppressive monopolies, thus introducing the very constraints that were being avoided. Thus, some kind of monopoly prevention is required, and we've worked out a pretty good set of anti-monopoly laws over the years, but we have to enforce them.
We also need to realize that unconstrained markets will lead to constrained markets. Some kind of constraint will be imposed, best that those constraints are devised and voted by the general public rather than by a few indviduals in a small room.
Capital-based economic systems, where some kind of artificial good like money, is used to symbolize value, are subject to artificial boom-bust cycles, i.e., not driven by natural phenomena like flood and drought, but by systemic phenomena, like speculation. That's been recognized for hundreds of years. Capital systems are unstable, every trend re-enforces itself, whether up or down. Too much positive feedback. The cure is to introduce negative feedback, which usually must be done with non-economic social functions like taxes and regulation.