Everything for Sale: The Virtues and Limits of Markets

by Robert Kuttner

Book Overview

In this highly acclaimed, provocative book, Robert Kuttner disputes the laissez-faire direction of both economic theory and practice that has been gaining in prominence since the mid-1970s. Dissenting voices, Kuttner argues, have been drowned out by a stream of circular arguments and complex mathematical models that ignore real-world conditions and disregard values that can't easily be turned into commodities. With its brilliant explanation of how...

• Format: Paperback
• Language: English
• ISBN: 0226465551
• ISBN13: 9780226465555
• Release Date: May 1999
• Publisher: University of Chicago Press
• Length: 432 Pages
• Weight: 1.65 lbs.
• Dimensions: 0.9" x 6.0" x 9.0"

Customer Reviews

Prescient

Amazingly so. Although the book was written almost a decade ago, it addresses issues that are tumbling out of today's headlines. After relentless efforts to loosen the dreaded "regulation" in the housing market, America is treated to yet another "market failure," and the very pitchman who were proclaiming the supremacy of "pure, unfettered markets" are the first at the trough asking for a government bailout; if the government fails to act decisively, then it will be bad for the "economy." Or at least Bear Sterns economy. Kuttner's book foreshadows this outcome. I saw strong parallels between this book, and Bjorn Lomborg's "Cool It." In Lomborg's book he states very clearly that he believes the earth is warming, and that man's actions are responsible. But his central theme is: How serious is this? And what are cost effective actions given the other problems that could be solved? And the man is pilloried by the ideologues of global warming, who, in their most extreme manifestation, place any equivocation on global warming in the "holocaust denial" category. Kuttner states emphatically that he is a believer in markets, in some sectors of economic endeavor, like supermarkets, they work quite well. But he makes the (to me) obvious point that in most sectors the markets must function in a framework of rules that are designed for the overall good of society, and not just for the narrow framework of a few people's "profit maximization." Kuttner writes from the perspective of an economist. Yet there is not a single equation in the entire book, but there is the economic jargon, by in large explained well, such as "externalities," that the general reader must master. As a counterpoint to the advocacy of unfettered markets for food, he has an excellent chapter on markets and medicine, in which he carefully builds the case on how utterly inefficient and ineffective "markets" are in delivering health care - and makes the comparison with the much more efficient methods of all the other major industrial countries, who deliver universal health care much cheaper, with far less paperwork. Perhaps the most stunning chapter is on the financial markets themselves. Surely if one sector should flourish under the free market ideology, it should be this one. Yet they invariably swing from manic highs to depressing lows; and when they "crash" all the talk of "no government interference in the markets" goes out the window - and talk of government bailouts comes in. Kuttner shows flashes of wry humor, as he deconstructs the tautologies of the unfettered free market advocates. The later invariable start with premises that clearly ignore real world activity, and assume that a market's outcome is the highest and most efficient outcome, and then proceed to "prove" various premises. In short, they are closed systems, much like many religions, or the Communist party, that have the "answers" to any real world situation, as long as you accept the initial premises -

Democracy not for Sale: a Fair and Balanced View of Markets

Everything For Sale is a powerful response to the wave of ideologically motivated free market boosterism that passes itself off as works of sophisticated scholarship. Notice the subtitle: The Virtues and Limits of Markets. Kuttner does, in fact, praise markets for their strengths. He has little patience, however, for the abstract ideal of a pure market, which is as illusory as Kant's thing-in-itself. He asks that discussions of markets and regulations bearing upon markets account for the way things really work, with conclusions supported by actual case studies. Instead what Kuttner finds is the scholarship of those questing for the grail of a pure market relies primarily on deductive reasoning, tautologies, abstract models and unlikely presuppositions (the rational maximizer, for example), rather than sound historical analysis. Of course, it is easy to cherry pick regulatory failures, but ideologues that ignore or misrepresent counter examples of regulatory necessity and success disserve the cause of democracy -- they see only the virtues, not the limits of markets. Kuttner effectively argues for a nuanced view of markets and regulation in his discussion of health care and money markets, in his discussion of democratic, human and environmental values, none of which can be reduced to market values, but all of which appropriately rely on markets to varying degrees to achieve communal and individual good. Kuttner does not argue that regulation is always the solution for market limits and failures, but he decisively rejects that dogma that no matter how bad things are, government involvement will always only make it worse. He rejects the market vs. regulation dualism, and the cynicism that says market values are all that matter. Everything For Sale presents a well reasoned and well written case for reevaluating the public institutions upon which our democracy (and markets) depends. If anything, it is a more important book today than it was when written in 1996.

A valuable read

The point that Kuttner makes in this book is that laissez-faire markets are not always ideal in certain segments of society, and that in these areas, a combination of government regulation and market economics produces the best practical outcome. In the field of healthcare, for example, there are extra-market values--namely, the principle that no one should want of medical care because they can't afford it--that the market doesn't (indeed, CAN'T) account for. Another example is telephone regulation. If it were up to the market, rural populations would never receive telephone service, because the marginal cost of servicing these rural areas is too high. It is a valuable public good to ensure all citizens have access to a telephone in their own home. Laissez-faire economists (often unconsciously) use circular reasoning to find that markets are better. Or, more often, they simply take it for granted.

At last, an economist in touch with reality

If you really want to understand how the economy works to create winners and losers, this book is the place to start. It is a dangerous book. Four hundred pages overflowing with historic detail. No simplistic models or mathematical equations. No easy answers. Savy analyses of real industries that will be helpful to any stock market operator. The book will be attacked by ideologues and some of its proscriptions are debatable. But no intelligent person can come away from it without a clearer understanding of our business system and the compelling need for mature political solutions to contemporary economic problems.

Wonderful and Dangerous!

The measure of a truly great, effective book is the amount of panic it inspires in its enemies. Judging by the vituperative rhetoric coming from some of the free-market zealots who have read the book, Capitalists must be devastated by Kuttner's clear, rational, and persuasive argument.