Mark Thoma points to Paul Krugman’s latest thoughts about free markets and companies:
We may live in a market sea, but that sea is dotted with many islands that we call firms, some of them quite large, within which decisions are made not via markets but via hierarchy — even, you might say, via central planning. Clearly, there are some things you don’t want to leave up to the market — the market itself is telling us that, by creating those islands of planning and hierarchy. (…)
The thing is, however, that for a free-market true believer the recognition that some things are best not left up to markets should be a disturbing notion.
Why should it? Nobody ever doubted that there are benefits to stable work relations, to “command-and-control” and to having co-workers instead of ever-changing trading partners.
The important question is: Who is to say when markets are better and when companies are better? It might be best to leave this decision to the people whom it concernes. A.k.a. “the market”.
__________________________________________________________
English blog posts can be found at https://www.fazitblog.de/english, an RSS feed is available at https://www.fazitblog.de/english/rss. Social Media:
The author’s Social Media profiles:
