Anybody who’s put a few beers in me and even approached saying the word economics knows that I launch into a rant about how free-market economics aren’t the answer to everything. My tag line is: free-markets economics are really good at making sure that each laptop I buy is cheaper than the last but, at the same time, it’s really terrible at addressing issues like stimulating new research into treatments for tuberculosis and malaria because there’s a lot more money to be made by coming up with new treatments for curing rich, white people of their baldness. I’ve since come up with a new catch-phrase: thinking that one economic system will solve all the world’s problems is like thinking one golfer can win every tournament. Each player has particular strengths and weaknesses that make them better or worse suited for different courses the same way different economic systems are better suited at addressing different problems. It could very well be that free-markets can address most issues (a Tiger Woods of the economic world) but let’s forget the idea that it can solve all our problems. Sometimes, let’s remember there are other possibilities.

Am I  communist? No. Am I socialist? Sometimes–for somethings, maybe. (I’m also not an economist so I’d love to hear about different points of view on this subject. If there are any glaring mistakes in my logic, correct me now before I make a bigger fool of myself!)

That’s why I’m looking forward to reading William Easterly’s (who seems to get mentioned a lot around here, I may have a minor obsession) review of Matt Ridley’s book The Rational Optimist. Ridley is a prolific science writer as well as the former American editor of The Economist so he is in a unique position to cover the topic of markets. I’m at a workshop all day so I haven’t read the first few lines but I like what I see:

The word “market” tends to set off a religious war. Opponents accuse proponents of blind faith in the Miracle of the Market. The proponents too often seem to confirm this accusation by overpromising and underproving what the market can do. (Opponents are often guilty of equally unthinking belief in the Immaculate Government Intervention.) Each side recites its creeds, giving heart to the faithful but making no converts.

Alas, Matt Ridley’s new book, “The Rational Optimist,” which argues for markets as the dominant source of human progress, is such a case. It didn’t have to be so. Ridley, the author of “The Red Queen” and “Genome,” is a gifted science writer who could have brought a more neutral perspective to the debate. Yet he shows a surprisingly casual attitude toward logic and evidence, which is likely to cause the antimarket side to see him as rigging the contest. It’s an example of a phenomenon many economists have noted: natural scientists have remarkably low standards for reasoned argument when they discuss social science, as compared with the rigor they bring to their home fields. (click here for the whole article)

I’m looking forward to sitting down with this. Particularly because of my habit of reading the last paragraph before reading the rest of the article:

So read “The Rational Optimist” for its fascinating history of trade and innovation. But also ponder whether the debate over markets can move forward while it remains a purely religious war. Those willing to confront honestly all the doubts about the “free market” might then actually be persuasive in arguing that it is the worst system humans have ever tried — except for all the others.

Easterly has a bit more on a blog post at his web page that says, in crystal clear words, what I think about this issue and every other issue that invokes strong emotional–what Easterly refers to as religious–responses:

It doesn’t do the free market side any favors if all of its advocates are willing to overlook sloppy logic and evidence and just follow clan-like loyalties based on the final conclusions. We will only move beyond the “religious war” if both the anti-market and pro-market sides are rigorously honest about the strengths and weaknesses of their own arguments.

I’m always more willing to listen to people I disagree with when they’re willing to acknowledge the weak points of their arguments.