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Marketcraft

How Governments Make Markets Work
Narrated by: Ryan Burke
Length: 7 hrs and 10 mins
Categories: Nonfiction, Economics
3.5 out of 5 stars (2 ratings)

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Publisher's Summary

Modern-day markets do not arise spontaneously or evolve naturally. Rather they are crafted by individuals, firms, and most of all, by governments. Thus "marketcraft" represents a core function of government comparable to statecraft and requires considerable artistry to govern markets effectively. Just as real-world statecraft can be masterful or muddled, so it is with marketcraft.

In Marketcraft, Steven Vogel builds his argument upon the recognition that all markets are crafted then systematically explores the implications for analysis and policy. In modern societies, there is no such thing as a free market. Markets are institutions, and contemporary markets are all heavily regulated. The "free market revolution" that began in the 1980s did not see a deregulation of markets, but rather a re-regulation. 

Vogel looks at a wide range of policy issues to support this concept, focusing in particular on the US and Japan. He examines how the US, the "freest" market economy, is actually among the most heavily regulated advanced economies, while Japan's effort to liberalize its economy counterintuitively expanded the government's role in practice.

©2018 Oxford University Press (P)2018 Tantor

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  • Philo
  • San Diego, CA, United States
  • 09-01-18

3 very worthy ideas, but endlessly rephrased

The three ideas are these:
1. Governance is not merely official government, but includes private actors and arrangements. This idea is not original, from my point of view; I've been teaching it for quite awhile myself, but, as the author notes, it gets insufficient attention. Elsewhere, one can see similar thinking, though in different terms, for example, in Lawrence Lessig's Code 2.0 (2006) where Lessig asked, within a slightly different context, what is the architecture of control? What (all) regulates a thing?
2. A binary split between free markets and regulated ones is reductive, simplistic, and misplaced. This simplistic, widespread view distorts discussion and the formation of good policy. Here I agree, up to a point. This logically stems from point 1 above. The simple imposition or withdrawal of more government rules does not equate to a more efficient or effective market. It is always more complicated.
3. Markets, in their modern complexity, don't just happen by themselves. Government has a key role, one that can easily go awry. But merely dismissing government as a source of friction and costs upon markets is a mistake.
Okay fine, but these things can be said (as I just did) in under one page. Now what? Do these few ideas (albeit important) equate to a book? My answer is, no, at least as done here. The better part of the remainder of the book was a series of case studies of getting the above matters wrong, particularly a fairly sketchy one of deregulation, so-called, of California's electricity markets circa 2000, and of Japan's attempt to consciously depart from its old internally-cooperative Keiretsu system to a more competitive and tech-savvy US-styled one. The latter was quite well explained. OK, so we have half a book here which is very good.
The worst of the remaining book, it sure felt like the remaining half, is endless reiteration of the foregoing in slightly different phrasings. And the prescriptive part, what should be done, as it closes, was disappointing to me. It amounted to a soggy recapitulation of progressive nostrums. There are two constant straw-men in this book: the naif who constantly shoves the world into free markets or regulated ones (the author constantly sets up and knocks down); and the entirely theoretical, so-called progressive planner who can, by some undefined means, get markets "right" (author's word, not mine). Ignored, or perhaps not grasped by this author, is the mess of plans plus just trying things and sometimes they break, i.e., what we already often have, i.e., markets doing what they do well: literally discovering success and failure, often not subject to advance calculation entirely. But our hero here, the progressive market designer, moves in some glowing undefined space of wisdom, that is, except there should be some fuzzy, pie-in-the-sky, more stakeholder-centric model, the same tired undefinable nag Elizabeth Warren is now flogging politically. I.e., we have circled back to the same governance debates we already had, with slight window-dressing tacked on. But the endless restatements of the same ideas here become truly tedious and dreary. My time is precious, professor! Don't waste my time.
My intuition (before googling the guy) was, this must a professor in a tenure system, publish-or-perish, with some incentives for padding out what should be a pamphlet into a full-sized book. Reading this for some starry-eyed undergrads might genuinely be an epiphany-inducing experience. Not for me. These ideas are still valuable for many to chew on, and that includes legislators. Had this concept (and the examples, especially the prescriptive stuff) been fleshed more, I would like it better. But I detect a certain laziness past the first burst of, really, just a few ideas. Important ones, needed ones for contemporary debate, but not earth-shaking to me.