There is a serious flaw in Stiglitz argument that market dynamics naturally fail.  In fact this is a serious flaw in many who today categorise the credit and banking crisis as one that is a result of trust in natural market dynamics. The truth is most of the individual mistakes boil down to just one: a belief that markets are self-adjusting and that the role of government should be minimal. Looking back at that belief during hearings this fall on Capitol Hill, Alan Greenspan said out loud, “I have found a flaw.” Congressman Henry Waxman pushed him, responding, “In other words, you … Continue reading Flawed assumptions about market theory | Stiglitz