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How Markets Fail: The Logic of Economic Calamities
 
 

How Markets Fail: The Logic of Economic Calamities [Kindle Edition]

Cassidy John , John Cassidy
4.6 out of 5 stars  See all reviews (17 customer reviews)

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Review

A very good history of economic thought (Economist )

How Markets Fail offers a brilliant intellectual framework . . . fine work (New York Times )

A powerful argument . . . Cassidy makes a compelling case that a return to hands-off economics would be a disaster (BusinessWeek )

An essential, grittily intellectual, yet compelling guide to the financial debacle of 2009 (Geordie Greig, Evening Standard )

This book is a well constructed, thoughtful and cogent account of how capitalism evolved to its current form (Telegraph Books of the Year recommendation )

John Cassidy ... describe[s] that mix of insight and madness that brought the world's system to its knees (FT, Book of the Year recommendation )

Anyone who enjoys a good read can safely embark on this tour with Cassidy as their guide . . . Like his colleague Malcolm Gladwell [at the New Yorker], Cassidy is able to lead us with beguiling lucidity through unfamiliar territory (New Statesman )

Product Description

How did we get to where we are? John Cassidy shows that the roots of our most recent financial failure lie not with individuals, but with an idea - the idea that markets are inherently rational. He gives us the big picture behind the financial headlines, tracing the rise and fall of free market ideology from Adam Smith to Milton Friedman and Alan Greenspan. Full of wit, sense and, above all, a deeper understanding, How Markets Fail argues for the end of 'utopian' economics, and the beginning of a pragmatic, reality-based way of thinking.



A very good history of economic thought Economist



How Markets Fail offers a brilliant intellectual framework . . . fine work New York Times



An essential, grittily intellectual, yet compelling guide to the financial debacle of 2009 Geordie Greig, Evening Standard



A powerful argument . . . Cassidy makes a compelling case that a return to hands-off economics would be a disaster BusinessWeek



This book is a well constructed, thoughtful and cogent account of how capitalism evolved to its current form Telegraph Books of the Year recommendation



John Cassidy ... describe[s] that mix of insight and madness that brought the world's system to its knees FT, Book of the Year recommendation



Anyone who enjoys a good read can safely embark on this tour with Cassidy as their guide . . . Like his colleague Malcolm Gladwell [at the New Yorker], Cassidy is able to lead us with beguiling lucidity through unfamiliar territory New Statesman




John Cassidy has covered economics and finance at The New Yorker magazine since 1995, writing on topics ranging from Alan Greenspan to the Iraqi oil industry and English journalism. He is also now a Contributing Editor at Portfolio where he writes the monthly Economics column.


Two of his articles have been nominated for National Magazine Awards: an essay on Karl Marx, which appeared in October, 1997, and an account of the death of the British weapons scientist David Kelly, which was published in December, 2003. He has previously written for Sunday Times in as well as the New York Post, where he edited the Business section and then served as the deputy editor.


In 2002, Cassidy published his first book, Dot.Con. He lives in New York.


Product details

  • Format: Kindle Edition
  • File Size: 649 KB
  • Print Length: 401 pages
  • Page Numbers Source ISBN: 0374173206
  • Publisher: Penguin (31 Jan 2013)
  • Sold by: Amazon Media EU S.à r.l.
  • Language: English
  • ASIN: B00ADNPCNE
  • Text-to-Speech: Enabled
  • X-Ray:
  • Average Customer Review: 4.6 out of 5 stars  See all reviews (17 customer reviews)
  • Amazon Bestsellers Rank: #44,995 Paid in Kindle Store (See Top 100 Paid in Kindle Store)
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Customer Reviews

4.6 out of 5 stars
4.6 out of 5 stars
Most Helpful Customer Reviews
15 of 15 people found the following review helpful
5.0 out of 5 stars An essential primer 3 May 2010
By Chuck E VINE VOICE
Format:Hardcover
Amid the plethora of books about the credit-crunch (which has become a boom industry in itself), this account stands out for providing the context in which these events occurred. While many others have dealt with the immediate causes of the crisis and its aftermath, Cassidy takes the time to provide a short history of the economic theories that inform these processes - without which any explanation is inadequate.

Running through 200 years of economic theory might not enliven the spirits, but it's a measure of Cassidy's achievement that he makes it both informative and entertaining. And it is only through understanding how beliefs about the free market and economic efficiency serve certain interests, and feed into an ideology that uses circular reasoning to justify its relevance, that the contradictions that have imploded so spectacularly can really be understood - and how a theory which emphasises transparency could result in a system that depends on the kind of asymmetries of information and off-balance-sheet accounting that ensures that markets are so opaque and impenetrable that even the bank's own managers don't understand them.

From myths such as the Efficient Market Hypothesis and the rational individual, to the Prisoner's Dilemma (which ensures that we are condemned to act against our own best interests), Cassidy provides a balanced and thought provoking overview of market behaviour, before rounding it off with an explanation of the current crisis.

An essential read for anyone wishing to grasp the fundamental processes at work.
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37 of 39 people found the following review helpful
Format:Hardcover
There has been almost as much comment and media analysis of the credit crisis as there were panicked trades in the markets at its peak. Most comment has taken an aggressive or defensive position around the role of bankers. John Cassidy's outstanding book is a dispassionate but engaging look at the historical, economic, sociological and academic context of the sub-prime crash and its terrible aftermath.

Cassidy does have a message, eloquently argued: the vast majority of economists, bankers and policy makers of the last three decades have been blindly irresponsible in their wholehearted espousal of the unfettered free market. Indeed, he refers to the ideologies of the Chicago school as "Utopian Economics". His arguments are deep, broad and lucid. He shows, quite irrefutably, how the perfect market, enlightened self interest, full information and other such axioms of the Friedman revolution are disastrously simplistic. The evidence of huge areas of hidden information, beauty contest group psychology and the paradoxical force of game theory outcomes is undeniable. The underlying force of markets, "rational self interest" often or even usually works against the mathematics of supply, demand and perfect information. His analysis of the reality of how bubbles happen and how disturbing they are for traditional economic theories of the market is explosively enlightening.

"How Markets Fail" also looks at the agents behind the disaster of the last two years. Cassidy is especially unforgiving of the once God-like Alan Greenspan. The old Fed Chairman's explanation for his arrogant irresponsibility in allowing - indeed encouraging - two major speculative bubbles (dot-com and sub-prime) to explode unchecked was a pathetic "The problem is..
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7 of 7 people found the following review helpful
5.0 out of 5 stars Market failures are endemic 27 Nov 2010
By Luc REYNAERT TOP 1000 REVIEWER
Format:Paperback|Verified Purchase
John Cassidy explains brilliantly the rise and fall of the free market ideology. Its application ended in the most sweeping extension of State intervention in the economies all over the world since the 1930s. The recent financial panic could have brought down any number of financial firms worldwide, which meant the total collapse of capitalism.

The Free Market and its ideologues
The `free market' ideology (laissez-faire) is an all-compassing way of thinking about the world and about man (the perfect homo aeconomicus) with markets as divine efficient and self-regulating processes.
Its prominent ideologues were A. Smith (the invisible hand of self-interest), F. Hayek (a system of price signals), V. Pareto (an efficient economy), K. Arrow and G. Debreu (the combination of efficiency and social equity), M. Friedman (monetarism), E. Fama (efficient stock markets) and R. Lucas (governmental intervention in the economy is counter-productive).

Criticism (no market nirvana)
For its critics, a free market economy is utopian, based on illusions of stability (bubbles are not aberrations), of rational irrationalities (124 banking crises in the last 40 years) and of predictability (markets don't follow regular patterns).
The prominent critics were J.M. Keynes (governmental intervention is needed in recessions), A. Pigou (no spontaneous coordination of private and social interests), F. Bator (oligo (mono)-polies destroy free markets, no markets for public goods), G. Akerlof and J. Stiglitz (market prices don't reveal all information) and H. Minsky (free market capitalism is inherently unstable).
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Most Recent Customer Reviews
1.0 out of 5 stars NOTHING RELATED TO MARKETS FAILING
Clearly, this book has fake reviewers as it would be inconceviable to give anything but the minimum stars. Read more
Published 21 months ago by THE TRUTH
5.0 out of 5 stars Not only How but Why Markets Fail
How Markets Fail by John Cassidy provides a detailed review of economic theories relating to the operations of markets and illustrates the power of ideas; sometimes - bad... Read more
Published on 27 April 2012 by Jean Michel
5.0 out of 5 stars Greenspan---The Man With The Matches
This superb book gives not only a wonderfully comprehensive and readable insight into the 2007/8 financial crisis in the U.S. Read more
Published on 24 Jan 2012 by Joe Cuddihy
4.0 out of 5 stars Enlightening, but a trifle depressing.
I bought this book in 2010 following the never ending exposure of the financial crisis in the media. Read more
Published on 10 Dec 2011 by Mr Average Grey Man
5.0 out of 5 stars How Markets Fail
Adam Smith laid the intellectual foundation for free enterprise in his widely hailed 1776 book, The Wealth of Nations, but he also supported tight regulation of banks to suppress... Read more
Published on 10 Nov 2011 by Rolf Dobelli
5.0 out of 5 stars Fine overview of the ongoing crisis of free-market ideology
In 'How Markets Fail' John Cassidy (a former Business Editor of the Sunday Times and a business journalist of long standing) considers the crisis of 2007-9 and its roots in the... Read more
Published on 8 July 2011 by Paul Bowes
4.0 out of 5 stars A thorough explanation of the credit crisis
This book reads like two separate books:
- page 17 to page 217 are a recap of the main economic theories
- page 217 to page 348 provides an account of the financial... Read more
Published on 20 Mar 2011 by LoveLife Reading List
5.0 out of 5 stars If you read Economics, then READ this!
Having read a lot of books picking over the bones of the financial crisis I was a little sceptical and a tad jaded by the topic. Read more
Published on 16 Feb 2011 by Ceteris Paribus
5.0 out of 5 stars Fine study of the free market's bankruptcy
In this brilliant book, financial journalist John Cassidy traces the rise and fall of free market ideology. Read more
Published on 27 Jan 2011 by William Podmore
5.0 out of 5 stars thoroughly good
good read, thorough and precise. a must for those who want to recap on theo economics as well as recent credit market failures
Published on 13 Sep 2010 by west_35th
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