Focusing on ways that markets work with, rather than against, governments to enhance public welfare.
The optimal mix of market forces and government intervention to allocate resources is one of the longest-standing problems facing human civilization. At the theoretical extremes, resources in centrally planned economies are allocated by the government, while resources in capitalist economies are allocated by private markets. In practice, market forces and government interventions co-exist to allocate goods and services in a political environment with shifting pressures to give one approach more responsibility than the other.
Current public attitudes toward markets are at a low point in the wake of the Great Recession and the growth in income inequality that began in the 1970s. However, in this book, noted Brookings economist Clifford Winston argues that it is a serious mistake to overlook that markets will be a critical part of the solution to any public objectivewhether it be to reduce inequality, stimulate long-term growth, slow climate change, or eliminate COVID 19. In Winston's view, policymakers should be much more aware of the many ways that markets help government to achieve economic and social goals and the potential that markets have to provide greater assistance in achieving those goals.
Winston synthesizes the empirical evidence on the efficacy of markets in helping to protect consumers against anti-competitive behavior and when technology appears to prevent price competition; to enable individuals to make more informed decisions; and to reduce negative externalities, improve public production, and encourage innovations. Importantly, Winston presents evidence indicating how markets can also help to reduce poverty, promote fairness in labor markets, and provide merit goods. Winston subjects his assessment to a robustness test by explaining how market forces have helped to address the COVID-19 pandemic by, for example, finding new ways for people to work safely and providing incentives for pharmaceutical companies to develop safe and effective vaccines.
Winston takes a proactive approach in his conclusion by suggesting the formation of a major Commission composed of academics, policymakers, and businesspeople. Such a panel could explore how market forces could provide greater help to government to address economic and social problems and could provide specific recommendations to facilitate market solutions where appropriate.
2. Perspectives on Government and Markets and the Scope and Content of the Analysis
Part I: Markets Helping Government Address Economic Goals
3. Why Markets Can Help Government Address Economic Goals
4. Protecting Consumers against Anticompetitive Behavior
5. Protecting Consumers When Technology Appears to Prevent Price Competition
6. Enabling Individuals to Make More-Informed Decisions
7. Addressing Negative Externalities Efficiently
8. Improving Public Production
9. Encouraging Innovations by Firms and Individuals
Part II: How Markets Can Help Government Accomplish Social Goals
10. Why Markets Could Help Government Achieve Social Goals
11. Reducing Poverty
12. Fairness in Labor Markets
13. Merit Goods
14. Expanding the Role of Markets to Help Address Social Goals Policies
Part III: Synthesizing the Evidence: Policy Inefficiencies and Efforts to Explain Them
15. Government Policy Inefficiencies and Efforts to Explain Them
16. Markets Helping Government
17. Some Broader Implications of Markets Helping Government
Part IV: Markets Helping Government: A Robustness Test and Proactive Perspective
18. Market and Government Responses to COVID-19: A Robustness Test
19. Conclusion: Advancing the Perspective of Markets Helping Government