Wednesday, October 17, 2007

Some Economic Sense
"Nobel Economics Winner Says Market Forces Flawed" Print E-mail

Tuesday, 16 October 2007
That's an actual current Reuters headline.

Princeton professor Eric Maskin shares this year's Nobel Prize in economics with two colleagues; the trio are pioneers in the field of mechanism design theory, which is dedicated to finding ways to make markets work more efficiently and fairly.

Maskin dares to say something fairly sensible, it turns out:

Professor Eric Maskin, one of three American economists to receive the award, said that he "to some extent" takes issue with free-market orthodoxy championed by U.S President George W. Bush and some other western leaders.

"The market doesn't work very well when it comes to public goods," said Maskin, a slight, soft-spoken 57-year-old who lives in a house once occupied by Albert Einstein.


"If I buy a car, I use the car, you don't and the market for cars works pretty well. But there are many other sorts of goods, often very important goods, which are not provided well through the market. Often, these go under the heading of public goods," he said.

Prof. Maskin goes on to speak of the needs of ensuring that public goods are provided for properly, taking into account the interests of all citizens, and on the role of his field in finding ways to do so most fairly and efficiently.

This should be considered sane, valuable, important work, especially if we care more about building sustainable human societies more than any ideology, yes?

However, the mere acknowledgment of this complex field is an affront to "free market" ideologues who prefer to believe that markets are, by their very existence, efficient -- in much the same way that food riots are, by their very existence, orderly.

Unfortunately, this remains something of a state religion in the US, so while hundreds of newspapers have reported on Maskin's winning of a Nobel, few have bothered to pick up the Reuters story of what the Nobel Prize winner actually says. (In fact, as I write this, the wire story is already a day old, and while I might have missed something, I can't find it in a single American newspaper.)

The efficiency of the great free market, absolutely proven once again.

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