Behind the alarming headlines about job losses, bank bailouts, and corporate greed is a little-known story of bad ideas. For fifty years or more, economists have been busy developing elegant theories of how markets work—how they facilitate innovation, wealth creation, and an efficient allocation of society's resources. But 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, 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. Taking the global financial crisis and current recession as his starting point, Cassidy explores a world in which everybody is connected and social contagion is the norm. In such an environment, he shows, individual behavioral biases and kinks—overconfidence, envy, copycat behavior, and myopia—often give rise to troubling macroeconomic phenomena, such as oil price spikes, CEO greed cycles, and boom-and-bust waves in the housing market. These are the inevitable outcomes of what Cassidy refers to as "rational irrationality"—self-serving behavior in a modern market setting.
Combining on-the-ground reporting, clear explanations of esoteric economic theories, and even a little crystal-ball gazing, Cassidy warns that in today's economic crisis, conforming to antiquated orthodoxies isn't just misguided—it's downright dangerous. How Markets Fail offers a new, enlightening way to understand the force of the irrational in our volatile global economy.
Ratings and Reviews
Be the first to review this book!
You've already shared your review for this item. Thanks!
We are currently reviewing your submission. Thanks!
How Markets Fail
by John Cassidy
Share your thoughts
Tell readers what you thought by rating and reviewing this book.
Rate it *
Please make sure to choose a rating
Add a review* Required
How to write a great review
- Say what you liked best and least
- Describe the author's style
- Explain the rating you gave
- Use rude and profane language
- Include any personal information
- Mention spoilers or the book's price
- Recap the plot
(0) 50 characters minimum
The review must be at least 50 characters long.
The title should be at least 4 characters long.
Display Name *
Your display name should be at least 2 characters long.
Report a review
Would you like us to take another look at this review?
You've successfully reported this review. We appreciate your feedback.
How Markets Fail
by John Cassidy
Thanks for Sharing!
by on September 28, 2016
- Farrar, Straus and Giroux, November 2009
Farrar, Straus and Giroux
- Download options:
- EPUB 2 (Adobe DRM)
You can read this item using any of the following Kobo apps and devices: