Yet real mechanics operate within the market, and an economist can use the theory of markets
to say useful and intelligible things about observed patterns of mechanical activity within a society.
Stringham discusses this in one of his most interesting and profound chapters, titled "Applying Hayek's Insights about Discovery and Spontaneous Order to Governance." Stringham lays out the tension in the late Friedrich Hayek's work between Hayek's theory of markets
and his theory of law and legislation.
But Stiglitz's papers, published in the 1970s and early 1980s, shifted the mainstream paradigm of the microeconomic theory of markets
The first five chapters tackle the subject from first principles, with George Mason University economist Peter Leeson asking, "Do markets need government?"; the Acton Institute's Samuel Gregg exploring the natural-law basis for free markets; Institute of Economic Affairs fellow Cento Veljanovski examining the connection between the common law and wealth; University of Manchester professor Anthony Ogus tackling the problem of fitting regulation into a theory of markets
; and University of Buckingham philosopher Norman Barry focusing on economic rights, especially the pernicious effect of treating these rights as less important than civil and political rights in modern legal systems.
Here, we have seen the inherent weaknesses of the neoclassical theory of markets
: its failure to understand that the economy is embedded in society and hence its narrow view of the economy.
For example, there was no good theory of markets
dominated by a few firms; macroeconomic phenomena could not be fully explained by microeconomics; and economic development needed its own type of theory.
He takes a common-sense approach to both theory and practice, describing the theory of markets
, market processes, data and information analysis, labor markets, and social, ethical and political considerations (including the Chicago School approach).
To her credit, she looks at the theory of markets
and health care and at specific practices and outcomes as markets affect health care, especially in the United States.
The so-called Keynesian revolution which transformed macroeconomic theory in the 1930s was largely untouched by these advances in the theory of markets
, continuing to rely on the time-honored assumption of atomistic competition.
In this important new book, Fligstein suggests that what is lacking is a coherent theory of markets
as social institutions.
Throughout the book, Mintrom builds from concepts embedded in economic theory of markets
to suggest that similar forces are at work in politics.
The Dow Theory of Markets
, which beat out the other methods from 1900 to 1937, after 1937 never did perform very well at all.