In a recent McKinsey report (“Harnessing the power of markets“), Martin Neil Bail supposedly speaks on behalf of how markets
Typical of mainstream economists, Baily gets the conclusion right:
The biggest opportunity for future growth is for policy makers and the citizens who elect them to take advantage of market forces.
Alas, he then mutters & mumbles through apologetics that provide ammunition for Statists & interventionists to undo all the good that he attributes to markets (NB: after a few remarks about the virtues of markets, the rest is about “market failure”!!!?!!!) …
Concerning his remarks:
1st, markets generate far more POSITIVE externalities than negative ones … market players also face incentives to find ways to mitigate negative externalities using localized information that is not available to centralized planners … .
2nd, there is ample evidence that severe recessions/depressions are not the logical outcome of markets but occur due to exogenous factors (i.e., actions taken by fiscal or monetary authorities) … as it is, markets tend to be stable due to the balancing forces of “bulls” & “bears” … the primary source of “herding” is when most market players react to the same information that eventually proves to be faulty … in terms of asset “bubbles”, this is most likely to be artificially-low interest rates conjured up by central bankers … .
3rd, recent widening of inequalities of income & wealth can be traced to “monetary central planning” whereby interest rates have been fixed at historically/hysterically-low levels creating incentives for banks to divert lending away from real sector where jobs might be created to more speculative activities that have benefited the 1% … .
In sum, this is a rather pathetic attempt to extol the beneficence of markets that becomes a paean to government intervention … !?!