Synopses & Reviews
The Great Recession has colored global life for years, yet few grasp its deep causes and many worry it can happen again. In this compelling book, economist Daniel Friedman and author Daniel McNeill reveal the underpinnings of such disasters.
They arise when morals sabotage markets, or vice versa. Morals and markets exist in a dangerous balance that has deeply influenced corporate life, terrorism, the War on Drugs, and global warming, among other issues related to our happiness. It is a core dynamic of our world. It touches the lives of people everywhere.
The ethical compass is a poor guide to the market landscape. As Friedman and McNeill demonstrate, our moral sense developed over eons in tribes on the African savanna, yet markets are quite recent. This book traces the rise of markets from ancient moral straitjackets to the freewheeling semi-morality that led to the 2008 crash. It addresses issues such as the Greek riots, the agony of the eurozone, and the ethics of bailouts, as well as acid rain, the Russian Mafia, poker, and the rescue of the halibut fishery. China went through a moral whipsaw over the last century and this book describes how its astonishing rise as a world market paralleled that of Europe. Morals and Markets also profiles figures such as Bernie Madoff and Bo Xilai, the Icarus of recent Chinese politics.
As Friedman and McNeill show, we must understand the dangerous balance of morals and markets—or we're in for debacles again and again.
"Anyone interested in markets and morals -- perhaps the central issue of our time -- should read this very interesting and thoughtful book." -- Tyler Cowen, Professor of Economics, George Mason University
"The message markets plus moral is excellent-- it is consonant with behavioral game theorys results, including experiments with small-scale societies, and with McCloskeys recent book on bourgeois morality. But, Friedmans message is simpler and clearer." -- Herbert Gintis, Santa Fe Institute, Central Europe University (Budapest) "I have been waiting for someone to write this book for a long time. Its use of historical anecdotes to explain why one cannot divorce a society's economics from its social contract is utterly convincing." -- Ken Binmore, Professor Emeritus, University College London "This book expertly addresses the most important issues confronting the continued evolution of morals and instituions for human socioeconomic betterment." -- Vernon L. Smith, George L. Argyros Chair in Finance & Economics, Chapman University
"Morals and Markets shows in example after example that absence of morals and absence of markets leads to poverty and suffering. Our modern society depends upon the balance between the two. And when they break down, as they have in the recent financial crisis, then we have chaos. Friedman and McNeill, who are fascinating on every page, have uncovered one of the fundamental principles of our existence." - George Akerlof, Nobel Laureate in Economics, 2001
"An engrossing and insightful read that draws on the sweep of human history to show the delicate balance between moral codes and economic market rules. This book should be mandatory reading for ideologues on both sides of the debates on the extent to which self-organized markets, freed of regulation, can be relied on to put food on our tables and keep at bay the beasts within us." - Daniel McFadden, Nobel Laureate in Economics, 2000
"As we evolved in small bands, and now live in a crowded civilization of seven billion, we face new problems in figuring out how to get along. This book greatly clarifies our situation by providing a world history of economic systems, and by analyzing many of the recent catastrophes of globalization. The writing is exceptionally vivid, the conceptual framework penetrating. It's a real achievement." - Kim Stanley Robinson, author of 2312 and the Mars Trilogy
"Anyone interested in markets and morals—perhaps the central issue of our time—should read this very interesting and thoughtful book." - Tyler Cowen, Professor of Economics, George Mason University
Economist and evolutionary game theorist Daniel Friedman demonstrates that our moral codes and our market systems-while often in conflict-are really devices evolved to achieve similar ends, and that society functions best when morals and markets are in balance with each other.
About the Author
Daniel Friedman is a well-known economist and theorist who has published widely in leading academic journals in economics, finance, psychology, and politics. His sits on the editorial board of the American Economic Review, the premier academic economics journal, as well as the boards of three other leaders in their fields: The Journal of Evolutionary Economics, Games and Economic Behavior, and Experimental Economics. He has received 11 National Science Foundation grants. His books include Experimental Methods: A Primer for Economists (1994) with S. Sunder; The Double Auction Market: Institutions, Theories and Evidence (1993), coedited with J. Rust, about the origin and efficiency of the rules of the New York Stock Exchange and Chicago exchanges; and Economics Lab: An Intensive Course in Experimental Economics, with Alessandra Cassar (2004). He is a professor of economics at his alma mater, the University of California, Santa Cruz.
Table of Contents
Prologue * Chapter 1. The Savanna Code: What Good are Morals? * Chapter 2. Bazaar and Empire: How Did We Become Civilized and Start Shopping? * Chapter 3. The Great Transformation: Why is the Modern World So Rich? * Chapter 4. Utopias of Cooperation: The Rise and Fall of Communism * Chapter 5. Russias Transition to Kleptocracy: When Markets Need Morals * Chapter 6. Japans Bubbles and Zombies: When Morals Choke Markets * Chapter 7. Towers of Trust: The rise (and occasional crash) of financial markets * Chapter 8. From Hudson's Bay to eBay: Why Do Some People Like Going to Work? * Chapter 9. Markets for Crime and Markets for Punishment * Chapter 10. Mullahs Revenge: Gangs, Cults, and Anti-Terrorists * Chapter 11. Cooling the Earth: Environmental morals and markets * Chapter 12: Future Morals and Markets: Can This Marriage Be Saved? * Appendix: Technical Details * Endnotes * Bibliography * Index