REINVENTING THE BAZAAR: The Natural History of Markets

An economics professor at the Stanford University Graduate School of Business, McMillan views this historical moment as a unique living laboratory for observing how technology, globalization and changing expectations of buyers and sellers have brought changes to everything from the international flower market based in the Netherlands to national economies. The sheer number of ingenious schemes that have surfaced over the last decade has had an intoxicating effect on McMillan; he skips from the 1994 FCC auction of the electromagnetic spectrum for pagers to the hugely popular Internet auction sites and the effects of intellectual property rights on innovation in this anecdotally rich survey of world markets and new trading opportunities. McMillan looks at a wide variety of industries—including interstate trucking and fishery management—and lays out the elements he regards as necessary for a smoothly operating market. An illuminating chapter comparing the deregulation and privatization experiences of New Zealand, Russia and China will leave readers wishing that McMillan had concentrated on just a few examples to establish in-depth his primary points: that good design of a market is crucial to its success, that a market develops over time by trial and error, and that government plays an indispensable role in providing public goods and acting as rule setter and referee in the best of all market-based worlds. As it is, the book feels scattered, and McMillan's tone is by turns condescending and frustratingly abstruse. Many readers will be disappointed. (May)