I agree with most of this. But it also needs to be said that a problem with free market is externalities; the legibility and accountability of side effects of the market transactions.
Factories generate pollution. The official part of the transaction is that the customers can buy widgets that improve their lives, and the factory owner gets rich. The side effect is that people living near the factory get cancer. The only thing needed to make this transaction happen is that the benefits of the customers exceed the costs of the producer; the costs of the cancer victims are not included in the equation.
Custodians in the US have higher real wages than custodians in India, even though they may be equally good at cleaning. This is because American custodians are more (economically) productive since they work for more productive firms.
That reminds me of another thing that is super unproductive by the same logic: providing services for poor people. An effective altruist might tell you that money used to cure one rich person could instead be used to cure hundred poor people; but an economist might respond that there is actually a good reason why we are already not doing that.
Interesting things happen when free market interacts with things that do not follow the rules of the free market. For example, if some products are produced using slavery, they can be further distributed on the free market, making all market participants more rich… which is an incentive for some of them to capture more slaves.
I agree with most of this. But it also needs to be said that a problem with free market is externalities; the legibility and accountability of side effects of the market transactions.
Externalities are indeed important and well-covered by the book. My review is not comprehensive.
An effective altruist might tell you that money used to cure one rich person could instead be used to cure hundred poor people; but an economist might respond that there is actually a good reason why we are already not doing that.
True, but also the economist may or may not mean “good” in a different sense than goodaltruism.
I agree with most of this. But it also needs to be said that a problem with free market is externalities; the legibility and accountability of side effects of the market transactions.
Factories generate pollution. The official part of the transaction is that the customers can buy widgets that improve their lives, and the factory owner gets rich. The side effect is that people living near the factory get cancer. The only thing needed to make this transaction happen is that the benefits of the customers exceed the costs of the producer; the costs of the cancer victims are not included in the equation.
That reminds me of another thing that is super unproductive by the same logic: providing services for poor people. An effective altruist might tell you that money used to cure one rich person could instead be used to cure hundred poor people; but an economist might respond that there is actually a good reason why we are already not doing that.
Interesting things happen when free market interacts with things that do not follow the rules of the free market. For example, if some products are produced using slavery, they can be further distributed on the free market, making all market participants more rich… which is an incentive for some of them to capture more slaves.
Externalities are indeed important and well-covered by the book. My review is not comprehensive.
True, but also the economist may or may not mean “good” in a different sense than goodaltruism.