Category: Law and Economics

I wrote two posts on the topic of markets last week. The posts were parts 1 and 2 of a longer post titled “Beyond the Market,” in which I highlighted some interesting facts and paradoxes about markets.

In response to those one of those paradoxes, Saleem writes:

I liked that bit:

‘It is always good, however, to keep in mind that those of us who live in industrialized countries — those of us who live in North America and in Western Europe, especially — are much less in contact with markets than some of us would like to believe.’

Would be cool to see that developed a bit more…”

So what did I mean when I said that we come in contact with the market much less than some people would have you believe?

Yesterday, I discussed Robert Neuwirth’s book Stealth of Nations: The Global Rise of the Informal Economy, which emphasizes the activities of “illegal street vendors and unlicensed roadside hawkers.”

I concluded by noting how that brought to mind a few conversations I’d recently had with a friend who was observing how, relative to Asia and Africa, few people actually knew how to hustle in America nowadays.

In my Law, Economics, and Organization seminar, I use an old textbook by Milgrom and Roberts. By “old,” I mean that it was the textbook used to teach economics of organization when I was in college. By “old,” I mean that the book is as old as some of my younger students. But I use it because it’s a classic, and because it covers just about everything one needs to know about law and economics and the economics of organization.

Market Paradoxes

In their book, Milgrom and Roberts highlight a first important paradox of markets (I am paraphrasing):