Inner Lives of Markets
What is a market? To most people it is a shopping center or an abstract space in which stock prices vary minutely. In reality, a market is something much more fundamental to being human, and it affects not just the price of tomatoes but the boundaries of everything we value.
Reading the newspapers these days, you could be forgiven for thinking that markets are getting ever more efficient - and better. But as Tim Sullivan and Ray Fisman argue in this insightful book, that view is far from complete. For one thing, efficiency isn't always a good thing - illegal markets are very often more efficient than legal ones, because they are free of concern for laws and human rights. But even more importantly, the chatter about efficiency has obscured a much broader conversation about what kind of economic exchange we actually want. Every regulation, every sticker price, and every sale is part of an ever-changing ecosystem - one that affects us as much as we affect it.
By tracing 50 years of economic thought on this subject, Fisman and Sullivan show how markets have evolved - and how we can keep making them better. This leads to fascinating and surprising insights, such as:
- Why your £10,000 used car is likely to sell for £2,000 or less;
- Why you should think twice before buying batteries on Amazon; and
- Why it's essential that healthy people buy medical insurance.
In the end, The Inner Lives of Markets argues for a new way of thinking about how you spend your money - it shows that every transaction you make is part of a grand social experiment. We are all guinea pigs running through a lab maze, and the sooner we realize it, the more effectively we can navigate the path we want.
Ray Fisman is the Lambert Family Professor of Social Enterprise and Research Director of the Social Enterprise Program at the Columbia Business School. He received his Ph.D. in Business Economics from Harvard University, and his work has been covered widely in the popular press, from Maureen Dowd in the New York Times to Al Jazeera to the Shanghai Daily. He also writes a monthly column for Slate. His first book, Economic Gangsters (with Ted Miguel), was published to great critical acclaim by Princeton University Press in 2008.
Tim Sullivan is an executive editor at Harvard Business Books. He has also worked at Basic Books, Portfolio, and Princeton University Press, and has worked with some of the world's leading economists.