Markets Work
Economists have a mantra which says “Markets work” and mumble under their breath the disclaimer “subject to a bunch of conditions, of course.” By “markets work” they mean that when a whole lot of buyers and sellers get together and buy and sell stuff, magic happens through Adam Smith’s invisible hand, and everyone ends up better off than they were before the trades took place. Each market participant has to be concerned with only his objective (maximizing utility in the case of consumers, and maximizing profits in the case …