How Markets Fail by John Cassidy
The Logic of Economic Calamities

No critic rating

Waiting for minimum critic reviews

See 9 Critic Reviews

unrated

Synopsis

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.

 

About John Cassidy

See more books from this Author
John Cassidy is a journalist at The New Yorker and a frequent contributor to The New York Review of Books. He is the author of Dot.con: How America Lost Its Mind andMoney in the Internet Era and lives in New York City.
 
Published November 6, 2009 by Farrar, Straus and Giroux. 401 pages
Genres: Business & Economics, Education & Reference. Non-fiction

Unrated Critic Reviews for How Markets Fail

Kirkus Reviews

See more reviews from this publication

In an ideal world, Cassidy writes, a market is a win-win environment: “Markets,” he declares by way of introducing the ever-pleasing Pareto equilibrium into the narrative, “facilitate mutually advantageous trading.” Ah, but there are wolves out there in possession of secret information, including...

| Read Full Review of How Markets Fail: The Logic o...

Publishers Weekly

See more reviews from this publication

Market disasters—and the cycle of delusions responsible—receive lively, engaging analysis by Cassidy (Dot.con ), a journalist at the

Oct 05 2009 | Read Full Review of How Markets Fail: The Logic o...

Publishers Weekly

See more reviews from this publication

Market disasters—and the cycle of delusions responsible—receive lively, engaging analysis by Cassidy (Dot.con ), a journalist at the New Yorker .

Oct 05 2009 | Read Full Review of How Markets Fail: The Logic o...

New York Journal of Books

See more reviews from this publication

you have a 50% chance all the same of making money by investing in its stock.This view had enormous consequences: It led to the development of mutual funds (why invest in a particular stock if the odds are only 50% that you’ll make money), and in the creation of the quant industry—since markets b...

Nov 10 2009 | Read Full Review of How Markets Fail: The Logic o...

The Globe and Mail

See more reviews from this publication

John Cassidy tells a story not only of how markets fail, but of how the profession of economist has failed

Jan 29 2010 | Read Full Review of How Markets Fail: The Logic o...

The Independent

ALLEN LANE £25 (400pp) £22.50 (free p&p) from the Independent Bookshop: 08430 600 030 The crisis which engulfed the global financial system over the past two years was not just a function of greed on Wall Street (or in Scotland), stupidity, poor regulation or even property bubbles which got out...

Nov 27 2009 | Read Full Review of How Markets Fail: The Logic o...

The Telegraph

Cassidy concludes: “When historians come to write about the ‘Greenspan Bubbles’, they will do so with good cause: more than any other individual, the former Fed chairman was responsible for letting the hogs run wild.” Cassidy is blessed with a rare combination of writing skills and in...

Dec 07 2009 | Read Full Review of How Markets Fail: The Logic o...

Management Today

they - like almost everyone else - failed to see the crash coming and thought their own shares were as good a bet as any.

Jan 01 2010 | Read Full Review of How Markets Fail: The Logic o...

Distilled Magazine

If a utopian economist and a reality-based economist were to approach a policy-maker with two different policy proposals, the average policy-maker would almost certainly pick the utopian proposal.

Aug 31 2012 | Read Full Review of How Markets Fail: The Logic o...

Reader Rating for How Markets Fail
79%

An aggregated and normalized score based on 82 user ratings from iDreamBooks & iTunes


Rate this book!

Add Review
×