Wednesday, October 7, 2020

Nobel Laureate on the Morality of Markets

This video is an interview with Vernon Smith. It's 56 minutes at normal speed. Smith is a slow talker. With the Settings control that looks like a gear, it can be played faster.

I recommend not downplaying his references to auction markets near the start. They exist far more than auctions per se. The trading of stocks and many commodities are in essence auction markets. In some markets there are parties who are mostly buyers and mostly sellers. For example, in the crude oil market, extractors are sellers and refiners are buyers.

Smith makes an interesting analogy between (1) government and its citizens and (2) parents and children. Government and parents exercise top-down control. Citizens and children adapt and cooperate on their own autonomously. 

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