Monday, May 25, 2009

Capitalism’s Fault Lines

It comes as something of a surprise that Posner, a doyen of the market-oriented law-and-economics movement, should deliver a roundhouse punch to the proposition that markets are self-correcting. It might also seem odd that a federal appellate judge (and University of Chicago law lecturer) would be among the first out of the gate with a comprehensive book on the financial crisis — if, that is, the judge were any other judge. But Posner is the late Daniel Patrick Moynihan’s successor as the country’s most omnivorous and independent-minded public intellectual. By now, his dozens of books just about fill their own wing in the Library of ­Congress.

3 comments:

  1. I heard him interviewed on NPR or MSNBC -- he also is or was a card carrying CATO Institute conservative which is even more amazing.

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  2. I notice he says "A Failure of Capitalism," which would appear to indicate he doesn't see it as a total failure.

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  3. As I recall his interview -- I think it was Olbermann who pressed him -- he thinks that government needs to step in and regulate markets because they are incapable of regulating themselves, a huge philosophical switch for someone who apparently once believed exactly the opposite.

    As the review you posted notes, "people made decisions that were individually rational but collectively irrational.... 'We are learning,' Posner writes, 'that we need a more active and intelligent government to keep our model of a capitalist economy from running off the rails.'”

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