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This is, in my opinion, a very important book that ought to be read by everyone.  Progressives commonly recognize, as conservatives do not, that there are no really “free” markets.  Therefore, progressive thought tends to focus on the need for additional regulation.  Marshall makes what is to me a surprising argument, namely that our entire concept of markets is tainted by the way the issue has been framed, and that there are potential fundamental alternatives that are not even being thought about.

The book is very readable.   Much, much more after the jump.

I will attempt a precis; material in italic is quoted from the book.

Chapter 1 – Coming into Being: In Praise of Markets

This chapter sets the tone for the book, which can best be conveyed by a few selected quotes:

The story of how economics moved from something that was seen as part of political or moral philosophy, which is to say thinking about how the world should work, to a science, which looks at how the world does work is a tragic one.

There is no free market.  There are only markets, and government creates them.  Markets are diverse in character and have different rules and boundaries.  Whether a market corrupts of makes the world more moral depends on those rules and boundaries.  A market where government establishes a price on Jews' heads obviously corrupts.  A market that establishes a place to buy green beans does not.  

Chapter 2 – Me and Mine: Property, the First Market

The buying and selling of property is one of the most obvious of markets, and one which is often used to illustrate the “clearing” function of markets.  In this chapter, Marshall traces the development of the concept of property and shows that it has evolved over time (at least in the English-speaking world) from having the King own everything to the modern principle of  “fee simple.”  He shows that government, far from being in opposition to property, enables its very existence through mechanisms like deeds and requiring surveys to establish boundaries.

Chapter 3 – Lex Non Scripta: the Laws We Don't Make, or, the Common Law

This chapter strikes me as almost an aside, though Marshall says he wants to relate the common law to markets.  I suspect he is laying a foundation for later discussion.

Chapter 4 – I Am My Brother's Keeper: Cooperatives

Cooperatives, at least in this country, do not comprise an entire market.  But they do operate on  different principals than their for-profit counterparts.  Marshall shows through an examination of a number of coops how these benefit their members, and indeed the consumers they serve.  One most interesting aspect is that a coop can function as both buyer and supplier, where in a for-profit such an arrangement would inevitably be a conflict of interest.

Chapter 5 – Trust: How We Cooperate to Compete

Again, an extract to convey a sense:

Healthy markets rely on trust and deteriorate if that trust erodes.  Bruce Scott of the Harvard Business School, in his 2009 book “The Concept of Capitalism,” compares economic markets, where people meet either physically or virtually to buy and sell to the 'common,' the piece of pasture or grazing land used collectively by a village.  Scott argues that just as the classic 'common' depended on villagers not abusing it by overgrazing, so the commercial commons depends on some sense of restraint and fair play by individual buyers and sellers.

Chapter 6 – Staking Claims on the Mind: Intellectual Property

Monopoly.  An odious word, depicting a practice that is diametrically opposed to the spirit of a free market.  Yet that is precisely what a patent or copyright grants.  This chapter explores how the protections for intellectual property came into being, and the tension between these and the broader interests of society.  On the one hand, the originator of an idea or creator of a work of art or literature deserves compensation for their effort.  At the same time, the power of the state to protect these temporary monopolies can be abused, as in, for example, the way the pharmaceutical industry games the system.  It is interesting that a totally free market as postulated by conservatives would not allow for these.

Chapter 7 – Little Commonwealths: Corporations and the State That Creates Them
Chapter 8 – The Future of Corporations

Marshall discusses the history of corporations and the wide variety of their governance.  He emphasizes that corporations are creatures of the State, however much that is forgotten these days.  There are other models than those currently in use in the US, and it might behoove us to adopt or adapt some of these to assure our creations serve a greater purpose than mere profit.

Chapter 9 – From Highways to Healthcare: Progress Through Infrastructure

It's not an economy that supports infrastructure (meaning schools, roads, water systems, Social Security, fire protection,libraries, courts, and so on); it's infrastructure that supports an economy.

Marshall argues that infrastructure (he prefers the term “public works) makes markets better, or indeed possible.  Take libraries, one of my favorite public works, as an example.  The availability of books was once limited to those who could afford them or who could join with like-minded people to create a lending library.  As we progressed, governments began to support the creation of public libraries, greatly expanding the marketplace of ideas.  Marshall further argues that those who theorize that markets drive infrastructure are wrong, citing schools and the interstate highway system as evidence.  Those who evaluate the economics of public works accordingly often fail to assign them a realistic value by an order of magnitude.

Chapter 10 – Making Places

Are our transportation systems organized around the places we live, or the other way around?  Marshall makes a strong case for the latter, and thereby the role of public works in making markets.  There are some interesting observations as well on the effects of planning or its lack.

Chapter 11 – The Great Nineteenth Century Train Robbery

Railroads had an enormous impact on this country.  There were undeniable benefits but they came at enormous costs.  Some of those costs continue today.  Marshall's conclusion:

What is clear from railroad history is that if government is to mix with private enterprise, something unavoidable in most instances, then it should do so in ways that serve its citizens, and that mission should come first.

Chapter 12 – A Socialist Paradise: the American Road System

The idea that transportation is built by the free market is simply false.  It requires too much money, too much investment, and too much time.  If you're not convinced, just take any road and look at its history.

Chapter 13 – Waiting for a Train Station

In which Marshall describes the effort to design and build a replacement for New York City's Penn Station.

There is these days a turning to the private commercial sector to do the job of the public sector.  But private interests look after their own business more than the public's.

Chapter 14 – What We Did Before: Path Dependence and Markets

The QWERTY keyboard layout is illustrative of path dependence.  This simply means the markets of today reflect the habits and usages of yesterday, and that these are slow to change.  A realistic view of markets has to take this into account.

Chapter 15 – Police and Prisons: Freedom, Security and Democracy

Police and prisons, while they represent the government's ability to use force to obtain conformance to societal norms, have evolved over time.  And, whether one regards them as a force for good, or an apparatus in need of extensive reform, they are part of the infrastructure that helps define modern markets.

Chapter 16 – Why Don't You Make Me? Government and Force

One view holds “that government is best that governs least,” which focuses on minimizing government's use of coercion.  A more positive view would hold that freedom encompasses the ability to participate in governance; to come together to make government a tool for securing FDR's four freedoms.

 Chapter 17 – Common Tongue, Common Culture, Common Markets

Markets and Societies work better when people speak the same language, when they have similar education levels, when they have similar values.  These things do not appear by magic.  So to have better-functioning markets, we actually need a more proactive state.

Chapter 18 – By Your Bootstraps: Developing Countries and Markets

South Korea has in the last half century risen from a poor, third-world country to a prosperous nation.  Marshall avers this was achieved by intense involvement of the government in deciding which markets to participate in and how, and supporting their industries in international trade.  He cites a number of other examples, both historical and current, to bolster this premise.

Chapter 19– Last Night Upon the Stairs: International Law

A brief exposition of the development of international law, which is part of the infrastructure facilitating international trade.

Conclusion – Making Better Markets

Drawing conclusions from the preceding discussion, several areas of possible improvement are proffered.

Afterword – My Own Story: A Circuitous Journey

Marshall discusses some of his background and influences shaping his views.

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