The Myth of the Free Market by Mark A. Martinez is exceptionally well researched and written. It reads more like a text book than a casual reader and, as such, should be required reading for every senior high school student in America. It thoroughly demolishes the concept that free markets exist on anything larger than a local scale and cogently explains why free markets on a larger scale are probably not possible. Beyond high school, it should be taught in every MBA and graduate economics program so that those who manage the financial empire actually have some relevant information about how things really work and are better able to cope with day to day reality. It is high time that delusional thinking stop being the core operating mode in both the private and public policy sectors of our economic world.
John Hemington,
McMurray, PA
Posted on Amazon.com / Dec. 7, 2009
Tuesday, December 8, 2009
Tuesday, September 29, 2009
Tuesday, August 18, 2009
TV INTERVIEW
In this interview I discuss some of the concepts I write about in my book, The Myth of the Free Market, with Bakersfield's local NBC affiliate (KGET 17) morning anchor Kiyoshi Tomono. If your computer can't support the spot you can try this YouTube site or this one.
Also, among the many radio interviews I've done across the country, I did a an interview with regional NPR host, Terry Phillips, in early April. Terry Phillips hosts Quality of Life, which has a wide audience throughout California's San Joaquin Valley. You can access it here. Click on "author interview." This is my favorite interview.
- Mark
Also, among the many radio interviews I've done across the country, I did a an interview with regional NPR host, Terry Phillips, in early April. Terry Phillips hosts Quality of Life, which has a wide audience throughout California's San Joaquin Valley. You can access it here. Click on "author interview." This is my favorite interview.
- Mark
BOOK REVIEW
Apart from the endorsements listed below, the following book review by Southern Utah University Associate Professor of Economics, Dr. David Berri, provides insight into what you can expect from my book. This review was originally published in the Kern Economic Journal (Vol. 11, No. 1), which you can access here.
*********************************
THE MYTH OF THE FREE MARKET: THE ROLE OF THE STATE IN A CAPITALIST ECONOMY
BY MARK A. MARTINEZ / KUMARIAN PRESS, 2 0 0 9
REVIEWED BY DR. DAVID BERRI, ASSOCIATE PROFESSOR OF ECONOMICS, SOUTHERN UTAH UNIVERSITY
Much has been said about how our current crisis is the “worst since the Great Depression.” Although our present economic problems certainly fall far short of what was experienced 80 years ago, much can be learned about how we view the current crisis by looking back at the 1930s.
At that time there were those who argued against employing market capitalism as the organizing principle for a nation’s economy. After all, while the market based economies of the United States and Europe experienced horrendous rates of unemployment, the centrally planned system utilized by the Soviet Union provided full employment to its citizens. Furthermore, the Soviet Union’s economy was actually growing in the 1930s. Into this debate stepped Friedrich Hayek. In the “Road to Serfdom”, Hayek demonstrated why a centrally planned system was doomed to failure. Hayek’s arguments in favor of capitalism were further echoed in the writings of Milton Friedman, whose work eventually inspired the “Reagan Revolution” in American politics. It was Ronald Reagan who argued “government is not the solution to our problem; government is the problem.” The choice Reagan presented was as follows: Either one could choose to solve problems via the free market. Or one could follow the example laid forth by communists and rely on the government. Given such a choice, the former is clearly preferred.
Within years of the “Reagan Revolution”, the Soviet Union collapsed. Furthermore, most other centrally planned economies have turned to capitalism and the free market system. All of this suggests that Hayek, Friedman, and Reagan were correct. Free markets – not government – should always rule the day.
The choice between government and markets, though, is a false choice. In “The Myth of the Free Market”, Mark Martinez argues convincingly that one cannot have market capitalism without government intervention. In fact, much of what we take for granted about capitalism was created and supported by government policies.
And when government fails to perform its proper function, the free market system itself fails to function.
Martinez begins his argument with the story with a Montana rancher named Lynn Cornwell. Cornwell came to Washington in 2000 to argue that the estate tax needed to be repealed. After all, a family should not lose both a family member and the family business at the same time. What Cornwell failed to note in his argument was that (a) there are no examples of a family farm being lost to the estate tax and (b) Cornwell had received more than $400,000 in federal subsidies to support his farm. In other words, Cornwell was opposed to government intervention when it might harm his interests. But he was more than willing to support government intervention when the invisible hand of self-interest led him to that conclusion.
The Cornwell story is not an isolated case. As Martinez notes “the self-interest and greed” that Adam Smith embraced in the market do not magically check itself at the gates of the state. Rather, the “laws of justice” (the shifting of resources from one party to another) that Smith spoke about are broken so consistently that we cannot simply shrug and chalk it up to market aberrations.” He goes on to add, “…market players – as the Lynn Cornwell case illustrates – often view the state as another vehicle to pursue their ends.”
It is important to note – as Martinez emphasizes – that Cornwell’s behavior is not some isolated incident. And this behavior is not something that has only manifested itself recently. The strength of Martinez’s argument lies in his frequent appeal to historical evidence in making his case.
Throughout this book Martinez makes reference to the historical figures and events that have shaped the capitalism observed today. Along the way we meet Genghis Kahn, William of Orange, Alexander Hamilton, Thomas Jefferson, James Madison, Michel Chevalier, and many others. In addition, Martinez references the writings of Adam Smith, Jeremy Bentham, Thorstein Veblen, John Kenneth Galbraith, and of course, Hayek and Freidman. The historical foundations of this book allow one to clearly see the role the state has played in the development of modern capitalism.
Returning to the 1930s, much has been made of the fact that Friedman’s study of the Great Depression concludes with the argument that this crisis was caused by a failure of government policy. According to Freidman, a simple recession became an economic catastrophe when the federal government allowed 33 percent of all banks to fail in the United States. It is important to note, though, that Freidman was not calling for less government intervention. No, Freidman actually believed that the Great Depression could have been averted by more aggressive government action. Specifically, Friedman himself believed the government should have done more to save the banks and expand the money supply.
Over time, though, this aspect of Freidman’s argument was lost. All that remained was the willingness to blame the government. This focus on blaming the government for societal problems led to a call for de-regulation in the 1980s. And this in turn led to the market excesses of the last twenty years.
Once again, we find ourselves in the same position seen eight decades ago. This time, though, decision-makers are actually following the original advice of Friedman. Banks are being bailed out and the money supply is being expanded. In addition, we are following the advice of John Maynard Keynes and employing government spending to return the economy to full employment.
In sum, the effects of our current crisis are being mitigated by the interventions of the state. As we learn from “The Myth of the Free Market”, the state has often played such a role. Furthermore – as Martinez forcefully argues – capitalism does not function well when government fails in its function.
One suspects that despite the current state of the economy, true believers in the “Reagan Revolution” will persist in their belief that “government is the problem.” For these people especially I recommend “The Myth of the Free Market.” Mark Martinez – via clear writing and a wealth of historical evidence – clearly demonstrates that the market mechanism without government intervention does not produce the outcomes society desires. Recent events do nothing but confirm this hypothesis. Now read this book and see why government can indeed be a solution to our problems.
In addition to teaching economics and his other academic related activities Dr. Berri is the co-author of Stumbling On Wins: Two Economists Expose the Pitfalls on the Road to Victory in Professional Sports and Wages of Wins: Taking Meassure of the Many Myths in Modern Sports, and numerous other academic articles. He also hosts his own website, The Wages of Wins Journal.
*********************************
THE MYTH OF THE FREE MARKET: THE ROLE OF THE STATE IN A CAPITALIST ECONOMY
BY MARK A. MARTINEZ / KUMARIAN PRESS, 2 0 0 9
REVIEWED BY DR. DAVID BERRI, ASSOCIATE PROFESSOR OF ECONOMICS, SOUTHERN UTAH UNIVERSITY
Much has been said about how our current crisis is the “worst since the Great Depression.” Although our present economic problems certainly fall far short of what was experienced 80 years ago, much can be learned about how we view the current crisis by looking back at the 1930s.
At that time there were those who argued against employing market capitalism as the organizing principle for a nation’s economy. After all, while the market based economies of the United States and Europe experienced horrendous rates of unemployment, the centrally planned system utilized by the Soviet Union provided full employment to its citizens. Furthermore, the Soviet Union’s economy was actually growing in the 1930s. Into this debate stepped Friedrich Hayek. In the “Road to Serfdom”, Hayek demonstrated why a centrally planned system was doomed to failure. Hayek’s arguments in favor of capitalism were further echoed in the writings of Milton Friedman, whose work eventually inspired the “Reagan Revolution” in American politics. It was Ronald Reagan who argued “government is not the solution to our problem; government is the problem.” The choice Reagan presented was as follows: Either one could choose to solve problems via the free market. Or one could follow the example laid forth by communists and rely on the government. Given such a choice, the former is clearly preferred.
Within years of the “Reagan Revolution”, the Soviet Union collapsed. Furthermore, most other centrally planned economies have turned to capitalism and the free market system. All of this suggests that Hayek, Friedman, and Reagan were correct. Free markets – not government – should always rule the day.
The choice between government and markets, though, is a false choice. In “The Myth of the Free Market”, Mark Martinez argues convincingly that one cannot have market capitalism without government intervention. In fact, much of what we take for granted about capitalism was created and supported by government policies.
And when government fails to perform its proper function, the free market system itself fails to function.
Martinez begins his argument with the story with a Montana rancher named Lynn Cornwell. Cornwell came to Washington in 2000 to argue that the estate tax needed to be repealed. After all, a family should not lose both a family member and the family business at the same time. What Cornwell failed to note in his argument was that (a) there are no examples of a family farm being lost to the estate tax and (b) Cornwell had received more than $400,000 in federal subsidies to support his farm. In other words, Cornwell was opposed to government intervention when it might harm his interests. But he was more than willing to support government intervention when the invisible hand of self-interest led him to that conclusion.
The Cornwell story is not an isolated case. As Martinez notes “the self-interest and greed” that Adam Smith embraced in the market do not magically check itself at the gates of the state. Rather, the “laws of justice” (the shifting of resources from one party to another) that Smith spoke about are broken so consistently that we cannot simply shrug and chalk it up to market aberrations.” He goes on to add, “…market players – as the Lynn Cornwell case illustrates – often view the state as another vehicle to pursue their ends.”
It is important to note – as Martinez emphasizes – that Cornwell’s behavior is not some isolated incident. And this behavior is not something that has only manifested itself recently. The strength of Martinez’s argument lies in his frequent appeal to historical evidence in making his case.
Throughout this book Martinez makes reference to the historical figures and events that have shaped the capitalism observed today. Along the way we meet Genghis Kahn, William of Orange, Alexander Hamilton, Thomas Jefferson, James Madison, Michel Chevalier, and many others. In addition, Martinez references the writings of Adam Smith, Jeremy Bentham, Thorstein Veblen, John Kenneth Galbraith, and of course, Hayek and Freidman. The historical foundations of this book allow one to clearly see the role the state has played in the development of modern capitalism.
Returning to the 1930s, much has been made of the fact that Friedman’s study of the Great Depression concludes with the argument that this crisis was caused by a failure of government policy. According to Freidman, a simple recession became an economic catastrophe when the federal government allowed 33 percent of all banks to fail in the United States. It is important to note, though, that Freidman was not calling for less government intervention. No, Freidman actually believed that the Great Depression could have been averted by more aggressive government action. Specifically, Friedman himself believed the government should have done more to save the banks and expand the money supply.
Over time, though, this aspect of Freidman’s argument was lost. All that remained was the willingness to blame the government. This focus on blaming the government for societal problems led to a call for de-regulation in the 1980s. And this in turn led to the market excesses of the last twenty years.
Once again, we find ourselves in the same position seen eight decades ago. This time, though, decision-makers are actually following the original advice of Friedman. Banks are being bailed out and the money supply is being expanded. In addition, we are following the advice of John Maynard Keynes and employing government spending to return the economy to full employment.
In sum, the effects of our current crisis are being mitigated by the interventions of the state. As we learn from “The Myth of the Free Market”, the state has often played such a role. Furthermore – as Martinez forcefully argues – capitalism does not function well when government fails in its function.
One suspects that despite the current state of the economy, true believers in the “Reagan Revolution” will persist in their belief that “government is the problem.” For these people especially I recommend “The Myth of the Free Market.” Mark Martinez – via clear writing and a wealth of historical evidence – clearly demonstrates that the market mechanism without government intervention does not produce the outcomes society desires. Recent events do nothing but confirm this hypothesis. Now read this book and see why government can indeed be a solution to our problems.
In addition to teaching economics and his other academic related activities Dr. Berri is the co-author of Stumbling On Wins: Two Economists Expose the Pitfalls on the Road to Victory in Professional Sports and Wages of Wins: Taking Meassure of the Many Myths in Modern Sports, and numerous other academic articles. He also hosts his own website, The Wages of Wins Journal.
Saturday, March 7, 2009
ADVANCE PRAISE . . .
"In this thoughful and erudite book, Mark Martinez forces us to re-examine the myth of the 'natural' free market order. Using very intelligently a wide range of fascinating historical and contemproary examples, he takes us through many important economic, political, and philosophical reflections about the true nature of the market system and its important but limited role in the construction of a civilized society."
"A fast-moving primer bursting with relevant examples, The Myth of the Free Market is---to put it mildly---eye-opening. Mark Martinez's insight could not have arrived at a more important time. Compelling from cover to cover."
"Explains the role of political processes in creating and supporting capitalist markets."
"An artfully assembled series of essays on political history, economic philosophy, and social behavioral responses to US and world events in modern times. Martinez presents all this in a clear and readable style ... Timely and well researched, this work should be recommended reading for any candidate for elected office in the US."
"In the midst of one of America's deepest economic recessions, Martinez offers, a timely, insightful, if not controversial work reexamining the centuries-old conundrum of the proper balance between free market capitalism and role of government in our market economy ..."
"Is a completely free market truly the best way to do things? The Myth of the Free Market: The Role of the State in a Capitalist Economy is a scholarly economic guide exploring how the concept of the free market is flawed, as evidenced by the emergence of the current economic crisis and the slew of bailouts that have come with it. Taking examples from history, The Myth of the Free Market explains the issue and shows why the free market is best enhanced with principles from other systems."
“Martinez provides a much-needed and welcome antidote to the free market mania that has dominated policy-making circles over the last thirty years ... Government’s powerful protection of markets is discussed in broad historical terms, with specific case studies, and thought-provoking analysis that connects perfectly with the current realities of our troubled economy and financial markets.”
“Ronald Reagan told us that “government is not the solution to our problem, government is the problem”. This statement helped convince an entire generation that government does little more than hinder economic growth and the well-being of society. Professor Martinez – via lucid writing and a wealth of historical evidence – clearly demonstrates that relying on private market players alone to protect the integrity of markets will not produce the outcomes society desires. Recent events confirm this hypothesis. Read this book and see why Ronald Reagan was wrong and how government not only organizes markets but can indeed be a solution to our problems."
"A thoughtful, timely, and fascinating read for anyone interested in a deeper understanding of the development of states and markets. Martinez's book provides a rich array of cases and a compelling argument for the central role of the state, and politics, in the development of markets--something to ponder in our current economic crisis.”
-- HA-JOON CHANG, University of Cambridge, Economist and Author of Kicking Away the Ladder, Bad Samaritan: The Myth of Free Trade and the Secret History of Capitalism, and 23 Things They Don't Tell You About Capitalism.
"A fast-moving primer bursting with relevant examples, The Myth of the Free Market is---to put it mildly---eye-opening. Mark Martinez's insight could not have arrived at a more important time. Compelling from cover to cover."
-- BILL HARNSBERGER, Daily Kos, Featured Writer (Bill in Portland Maine).
"Explains the role of political processes in creating and supporting capitalist markets."
-- PUBLISHER'S WEEKLY
"An artfully assembled series of essays on political history, economic philosophy, and social behavioral responses to US and world events in modern times. Martinez presents all this in a clear and readable style ... Timely and well researched, this work should be recommended reading for any candidate for elected office in the US."
-- JUAN M. RIVERA, University of Notre Dame, Professor of Accounting and Faculty Fellow, Kellogg Institute for International Studies, and co-editor of NAFTA and the Campesinos: The Impact of NAFTA on Small-Scale Agricultural Producers in Mexico and the Prospects for Change.
"In the midst of one of America's deepest economic recessions, Martinez offers, a timely, insightful, if not controversial work reexamining the centuries-old conundrum of the proper balance between free market capitalism and role of government in our market economy ..."
-- HENRY LOWENSTEIN, Dean and Professor of Management, E. Craig Wall Sr. College of Business Administration, Coastal Carolina University
"Is a completely free market truly the best way to do things? The Myth of the Free Market: The Role of the State in a Capitalist Economy is a scholarly economic guide exploring how the concept of the free market is flawed, as evidenced by the emergence of the current economic crisis and the slew of bailouts that have come with it. Taking examples from history, The Myth of the Free Market explains the issue and shows why the free market is best enhanced with principles from other systems."
-- MIDWEST BOOK REVIEW
“Martinez provides a much-needed and welcome antidote to the free market mania that has dominated policy-making circles over the last thirty years ... Government’s powerful protection of markets is discussed in broad historical terms, with specific case studies, and thought-provoking analysis that connects perfectly with the current realities of our troubled economy and financial markets.”
-- PETER H. LOEDEL, Professor and Chair, Department of Political Science, West Chester University
“Ronald Reagan told us that “government is not the solution to our problem, government is the problem”. This statement helped convince an entire generation that government does little more than hinder economic growth and the well-being of society. Professor Martinez – via lucid writing and a wealth of historical evidence – clearly demonstrates that relying on private market players alone to protect the integrity of markets will not produce the outcomes society desires. Recent events confirm this hypothesis. Read this book and see why Ronald Reagan was wrong and how government not only organizes markets but can indeed be a solution to our problems."
-- DAVID BERRI, Southern Utah University, Associate Professor of Economics and co-author of, Stumbling On Wins: Two Economists Expose the Pitfalls on the Road to Victory in Professional Sports and Wages of Wins: Taking Measure of the Many Myths in Modern Sports.
"A thoughtful, timely, and fascinating read for anyone interested in a deeper understanding of the development of states and markets. Martinez's book provides a rich array of cases and a compelling argument for the central role of the state, and politics, in the development of markets--something to ponder in our current economic crisis.”
-- LIA ROBERTS, Assistant Professor of Political Science, Mount St. Mary's College
Subscribe to:
Posts (Atom)
