On the limits of markets

by Elias Blum

Markets work, for the achievement of certain purposes, to a certain extent, in certain contexts. When markets are applied to other purposes, or are allowed to go beyond their proper extent, or are applied to wrong contexts, they cause havoc and destruction.

Or, to put it another way, markets are like fire: a good servant, but a bad master. The state’s function is, in part, to be a fire-guard and fire-extinguisher. If we forget that, then instead of being nice and warm we’ll burn the whole house down.

And that, basically, is what happened 1979-2008.