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The theories that I helped develop explained why unfettered markets often not only do not lead to social justice, but do not even produce efficient outcomes. Interestingly, there has been no intellectual challenge to the refutation of Adam Smith’s invisible hand: individuals and firms, in the pursuit of their self-interest, are not necessarily, or in general, led as if by an invisible hand, to economic efficiency. The only question that has been raised concerns the ability of government to remedy the deficiencies of the market. Within academia, a significant fraction of economists are involved with developing and expanding on the ideas of imperfect information that I explored. For instance, Edmund Phelps, this year’s Nobel Prize winner, belongs to this "school" of thought. But in political discourse, simplistic “market fundamentalism” continues to exert enormous influence. (en) |
