The book gives a simple explanation, with real-world examples, of how supply and demand work, and how prices are determined. It dispels the idea, familiar from the Economics textbooks, of ‘perfect competition’, explaining that markets actually handle very diverse products. Indeed, it is imperfections that drive the system. Entrepreneurs look for gaps where a demand is under-supplied and there is profit to be made by plugging the gap. The book then looks at big imperfections, such as monopolies and cartels, overspills, and things that cannot be rationed by the market. It shows how political attempts to correct these imperfections often have perverse results. The book closes by examining the morality of markets. It discusses such issues as: why feckless rock-stars are paid much more than worthy nurses; whether we should worry about people trading in arms, water, healthcare etc; whether black markets are immoral; and questions of equality; sweatshops, and fair trade.
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