Markets should not be left to run themselves

There is no sound basis at all, in economic theory or in practice, for expecting free markets to be beneficial, or harmful for that matter.

We should manage the economy the way we manage life, and always be aware that the best-laid plans might go awry.

More in my article in The Age today.

1 thought on “Markets should not be left to run themselves

  1. Bill Williams


    A fantastic essay. As students, neo-classical economists are equipped with a useful mental model model (the assumption of a free market which operates rationally) which simplifies reality and reduces complexity in order to make the patterns of economic theory and principles easier to understand. The trouble is that when they become influential economic advisers and decisionmakers they seek to impose that free market mental model of their economic fantasy on the real world.

    The Murray Darling basin water market is a case in point. Companies like Timbercorp were able to buy water from farmers at Shepparton and transfer it as far as South Australia. In this magic market, not one drop of that water water evaporated, seeped in to the water table or was consumed by red gums along the way. Then, when Timbercorp went broke they sold their entire water holdings to the Singapore governent. Such a clever market!

    I posted your essay on the Linkedin discussion forums “Requisite Organization” and “The Tavistock Institute” with some interesting responses!

    Bill Williams (



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