May 7, 2016
Complexity Economics Shows Us Why Laissez-Faire Economics Always Fails
Consider that if markets are perfectly efficient then it must be true that:
–The market is always right.
–Markets distribute goods, services, and benefits rationally and efficiently.
–Market outcomes are inherently moral because they perfectly reflect talent and merit and so the rich deserve to be rich and the poor deserve to be poor.
–Any attempt to control market outcomes is inefficient and thus immoral.
–Any non-market activity is inherently suboptimal.
–If you can make money doing something not illegal, you should do it.
–As long as there is a willing buyer and seller, every transaction is moral.
–Any government solution, absent a total market failure, is a bad solution.
Markets are a type of ecosystem that is complex, adaptive, and subject to the same evolutionary forces as nature. As in nature, evolution makes markets an unparalleled way of effectively solving human problems. But evolution is purpose-agnostic. If the market is oriented toward producing junk and calling it good GDP, market evolution will produce ever more marketable junk. As complex adaptive systems, markets are not like machines at all but like gardens. This means, then, that the following must be true:
–The market is often wrong.
–Markets distribute goods, services, and benefits in ways that often are irrational, semi-blind, and overdependent on chance.
–Market outcomes are not necessarily moral—and are sometimes immoral—because they reflect a dynamic blend of earned merit and the very unearned compounding of early advantage or disadvantage.
–If well-tended, markets produce great results but if untended, they destroy themselves.
–Markets, like gardens, require constant seeding, feeding, and weeding by government and citizens.
–More, they require judgments about what kind of growth is beneficial. Just because dandelions, like hedge funds, grow easily and quickly, doesnt mean we should let them take over. Just because you can make money doing something doesnt mean it is good for the society.
–In a democracy we have not only the ability but also the essential obligation to shape markets—through moral choices and government action—to create outcomes good for our communities.
http://evonomics.com/complexity-economics-shows-us-that-laissez-faire-will-never-work/
this is an important work. it should be adopted.