Big Books of Spring
De limieten van de markt

Questions About De limieten van de markt

by Paul De Grauwe

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I don't know why people give so negative ratings... from the perspective of an economics major this book is very insightful, although sometimes it gets a little bit frenetic ?
Alex Hey. I haven't read the book fully yet, but I don't think I will give it more than two stars. For that, it would really have to pick up, and I doubt i…moreHey. I haven't read the book fully yet, but I don't think I will give it more than two stars. For that, it would really have to pick up, and I doubt it will.

The thing is, the book falls completely flat for an Austrian economist like me. Both Walter Block and Hans Hermann Hoppe wrote exhaustive and, I think, conclusive critiques of the theories of public goods and externalities. Murray Rothbard described how negative externalities can be prevented by the consistent application of property rights, and while de Grauwe seems to have heard of this line of argumentation, he still doesn't seem to have read it from Rothbard himself. Carl Menger and Ludwig von Mises showed why monetary systems can exist, and are better off, without government intervention. And so on.

His methodology is also very sketchy sometimes. At one point, his graphs show that post-war Germany had lower taxes in the top brackets than anyone else, and that it saw higher economic growth than anyone else. He completely ignores this, and yet it's right there on his graphs. Or, he attributes a decline in productivity to the market, without discussing whether increased regulation might be a cause. He more or less jumps to that conclusion. "More or less" because you can perhaps sketch together some supporting arguments from what he said before, but even then, the case is far from conclusive.

He also doesn't seem very well-versed in history. He uncritically accepts, for example, the common wisdom that exploitation causes revolutions. Yet, North Korea has seen no revolution yet, and the USSR went on for almost a century before it peacefully broke down. Was exploitation in these countries really worse than during the Gilded Age? I highly doubt it. Furthermore, as Erik von Kuehnelt-Leddihn said, it's not always true that where's smoke, there's fire. France before the Revolution was actually quite liberal, and even Tzarist Russia was not nearly as bad as is commonly claimed. Even if they had been bad places, most revolutionaries are still bourgeois intellectuals who hardly felt the oppression before they took up their activities. Stalins father was a shopowner, Lenin was from the lower nobility, Trotskys family had an estate, and the list goes on. Nor did they rouse the working class. The working class, ironically, was the last class to start caring about the impending revolution, and the bourgeoisie was the first.(less)
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