by DANIEL W. BROMLEY
32p, 71,317 bytes
Fellows Address presented at the annual meeting of the American Agricultural Economics Association
Toronto, Canada, July 27-30, 1997
The market is offered up as the preferred solution to a wide range of problems, and as the truth rule by which to judge particular policy outcomes. Unfortunately, advocacy for the market rests on a false dichotomy between the "free" market and so-called government intervention, it ignores the constructed scarcities around which economists mobilize our analytical equipment, it ignores the logical impossibility of the market as a coherent metric by which to judge policy change, it is confused about the role of markets as guarantors of individual freedom, and it is predicated upon the quaint idea that market-based outcomes offer economists an objective truth rule for pronouncing on the social desirability of particular allocational results.
Economics has, since the early part of this century, been caught up in the geo-political struggle about whether a planned or a market economy is the superior way to organize social provisioning. The demise of Stalinist economics provides us with the opportunity now to be more circumspect about the alleged wonders of the market. Having won the battle against the planners, we must now be wary of losing the war to the general citizenry at home who remain seriously conflicted and fickle about the wonders of the market. In other words, it is time for some modesty about the alleged magic of the market.