Free Market: The History of an Idea

Leading theorists of markets believed in government controls and moralistic constraints to rein them in, according to this sprawling intellectual history. Soll (The Reckoning), a philosophy, history, and accounting professor at USC, recaps two millennia of market analysis that emphasized the need for economic exchange to be shaped by principles of fairness, not just profit-seeking, and guided by the state. (Even Adam Smith, he notes, deplored the machinations of businessmen and supported tariffs and other government economic interventions.) Soll’s hero is Louis XIV’s finance minister, Jean-Baptiste Colbert, who used state regulation and subsidies to jump-start 17th-century France’s industrial market economy—an approach followed, Soll contends, in Alexander Hamilton’s industrial policies and the New Deal. Soll unearths much interesting history—medieval Franciscan monks became pioneering economists by pondering how to manage their vows of poverty—but his arguments against libertarianism and “free-market thought” slip into caricature; he calls British economist Alfred Marshall and his followers “Captain Ahab-like in their fixation” on evicting the government from the economy and suggests that modern-day free-market advocacy is the province of reactionaries and racists. Despite its impressive synthesis of cultural, economic, and social history, this analysis is more likely to inflame than settle debates over the proper functioning of markets. (Sept.)