By Eric A. Posner & E. Glen Weyl
Revolutionary ideas on how to use markets to bring about fairness and prosperity for all
Many blame today's economic inequality, stagnation, and political instability on the free market. The solution is to rein in the market, right? Radical Markets turns this thinking - and pretty much all conventional thinking about markets, both for and against - on its head. The book reveals bold new ways to organize markets for the good of everyone.
It shows how the emancipatory force of genuinely open, free, and competitive markets can reawaken the dormant nineteenth-century spirit of liberal reform and lead to greater equality, prosperity, and cooperation. Eric Posner and Glen Weyl demonstrate why private property is inherently monopolistic, and how we would all be better off if private ownership were converted into a public auction for public benefit. They show how the principle of one person, one vote inhibits democracy, suggesting instead an ingenious way for voters to effectively influence the issues that matter most to them. They argue that every citizen of a host country should benefit from immigration - not just migrants and their capitalist employers. They propose leveraging antitrust laws to liberate markets from the grip of institutional investors and creating a data labor movement to force digital monopolies to compensate people for their electronic data.
Only by radically expanding the scope of markets can we reduce inequality, restore robust economic growth, and resolve political conflicts. But to do that, we must replace our most sacred institutions with truly free and open competition - Radical Markets shows how.
Ryan Avent on Medium.com wrote:
"In truth, the policies they advocate are so radical that they are unlikely ever to be adopted. But they may help jolt liberals out of their hand-wringing, and shape a new line of market-oriented thinking, as Milton Friedman’s Capitalism and Freedom did almost six decades ago. That too was an idealistically pro-market book, unconcerned with the feasibility of its proposals. [...] Yet they distance themselves from the “market fundamentalism” inspired by him, Friedrich Hayek and George Stigler. Such thinking is more concerned with protecting property rights than with correcting market failure. By contrast, their primary concern is to mount an onslaught against market power. That does not just mean the overweening clout of the tech titan or the oil baron. It includes the power intrinsic to the very property rights that market fundamentalists often defend. This power, the authors say, prevents markets themselves from being truly free. [...] Radical Markets is refreshing and welcome in its willingness to question received wisdom. Yet it will do little to mollify those who say liberal capitalism has neglected human needs beyond the yen for economic advancement—for community, say, or a sense of wider belonging. Such critics will understandably protest that market principles would sully institutions, such as property rights and elections, that confer dignity on individuals."
Irish Finance Minister Paschal Donohoe on Irish Times wrote:
"The book is more radical, and more powerful, if read as a work of political philosophy rather than a guide to market design. Some of the book’s ideas require radical overhauls to current assumptions about how economies and societies ought to be organised. The most radical thing about their proposal to reform property rights is the notion that private ownership of property is in some way a fundamentally flawed idea, and that progress requires movement toward a new norm: that social ownership of property is more just and efficient. I would wager that that notion will speak to many people in a more profound way than the next steps in their argument (that, therefore, all property should be up for auction at all times). [...] Reading the book, I wondered whether the authors would be happy if these radical notions proved influential while their preferred market extensions never caught on. Would it be better for society not to think such radical ideas if they are used to justify a more planned, or more morals-based economy, rather than a more market-oriented one?"
Sam Bowman on CapX ("For Popular Capitalism") wrote:
"The authors aim to create Radical Markets to “help break down privileges based on wealth and economic advantage”. These proposals are literally incredible. But we now grapple with developments that once were the stories of science fiction. This is typified by the magnificent epilogue which explains markets through the computing concepts of distributed computing and parallel processing. It then suggests a world where artificial intelligence will take the place of these markets. Read this difficult and provocative book. It made my head hurt, and then spin. In a world where our current economic and political models are worth defending but are straining, this can only be a good thing."
Hanoch Dagan on Michigan Law Review wrote:
"Throughout the book, examples of narrow problems (such as hold-ups in spectrum or land markets) are taken to show a general market failure in need of revolutionary solutions. Weak evidence and speculation is used to justify colossal claims. It’s superficially impressive, but ultimately shallow. [...]
Radical Markets is filled with ideas that, modestly applied, might be useful. Where it fails is in trying to present them as revolutionary alternatives to neoliberal capitalism. It is an interesting and original book – but a frustrating one too."
"This book review celebrates many of Posner and Weyl’s innovative ideas. It also concurs with their insistence that our challenging moment requires rethinking and may justify radical reconstruction of both the market’s rules of the game and its jurisdiction based on the market’s ultimate normative foundation. Posner and Weyl, however, also subscribe to a welfarist foundation and investigate some implications of taking it seriously: the creation of a radical labor market, which eliminates people’s authority to withhold their services, and a fully monetized electoral system. [...] But because people’s autonomy — and not the satisfaction of their preferences or their welfare — is the ultimate value of all the major institutions of a well-ordered society, these measures cannot be acceptable if they subvert people’s self-determination.
Moreover, getting to the root of the matter, as Posner and Weyl invite us to do, requires us to appreciate the ways in which markets are conducive to people’s autonomy and redesign them accordingly. Radicalizing markets along these lines indeed implies, as Posner and Weyl claim, creating true competitive, open, and free markets. But unlike the ideal markets advocated in Radical Markets, the configuration of these markets starts with freedom (as autonomy) and thus inclusion, rather than with competitiveness. A proper view of the market, therefore, needs to be both careful not to facilitate autonomy-reducing transactions and mindful of the necessary role of nonmarket mechanisms in securing the minimal social and economic conditions required for the market to properly comply with its autonomy-enhancing telos."
Short Presentation on the Book
Or alternatively, you may want to watch a longer lecture on the book.
- Why Radical Markets? (short explanation by the authors, with links to their 'radical heroes' and related 'radical movements')
- A radical plan to fix inequality is making waves with its many moral dilemmas (interview with Glen Weyl on Quartz)
- E Glen Weyl On Radical Markets, Ethereum, And Designing A Better Society (interview / article on ETHNews, 13 May 2018)
- Will Uprooting Capitalism and Labor Create a Just Society? (post on the MIT blog, 26 Mar 2018)
Table of Contents
- Preface: The Auction Will Set You Free
- Introduction: The Crisis of the Liberal Order
- 1 - Property Is Monopoly
- 2 - Radical Democracy
- 3 - Uniting the World's Workers
- 4 - Dismembering the Octopus
- 5 - Data as Labor
- Conclusion: Going to the Root
- Epilogue: After Markets?
About the authors
E. (Eric) Glen Weyl is a Principal Researcher at Microsoft Research and a Visiting Senior Research Scholar at Yale’s Law School and Economics Department. He was Valedictorian of his undergraduate class at Princeton in 2007 and received his PhD in economics from Princeton a year later. He was a Junior Fellow at the Harvard Society of Fellows, an Assistant Professor of Economics at the University of Chicago and is an Alfred P. Sloan Research Fellow 2014-2019. He aims, in the spirit of nineteenth century political economy, to interweave insights from a variety of now disjoint fields (such as economics, law, computer science, and philosophy) to propose practical ideas for radically expanding the scope of market exchange. He pursues these ideas both theoretically and practically, writing academic papers, writing for the public, engaging with policymakers and launching commercial ventures.
Eric Posner is Kirkland and Ellis Distinguished Service Professor of Law, University of Chicago. His books include The Twilight of Human Rights Law (Oxford, 2014); Economic Foundations of International Law (with Alan Sykes) (Harvard, 2013); Contract Law and Theory (Aspen, 2011); The Executive Unbound: After the Madisonian Republic (with Adrian Vermeule) (Oxford, 2011); Climate Change Justice (with David Weisbach) (Princeton, 2010); The Perils of Global Legalism (Chicago, 2009); Terror in the Balance: Security, Liberty and the Courts (with Adrian Vermeule) (Oxford, 2007); New Foundations of Cost-Benefit Analysis (with Matthew Adler) (Harvard, 2006); The Limits of International Law (with Jack Goldsmith) (Oxford, 2005); Law and Social Norms (Harvard, 2000); Chicago Lectures in Law and Economics (editor) (Foundation, 2000); Cost-Benefit Analysis: Legal, Economic, and Philosophical Perspectives (editor, with Matthew Adler) (University of Chicago, 2001). He is a fellow of the American Academy of Arts and Sciences, and a member of the American Law Institute.