>> So what I'm trying to address in the book,
The Illusion of Free Markets is this central paradox in public imagination today.
Conflict with this tension between, on the one hand the idea of, well, the free market.
The idea that the government in some sense is inefficient or ineffective or incompetent
at addressing issues of economic exchange.
And on the other hand the fact that we live in a country that has the largest prison population
by number and by rate in the world.
And so how is it exactly that you can on the one hand have a majority of the citizens feeling
that government is not very good at what it does, and yet allow the government
to incarcerate a full one percent of the population.
So one of the things that triggered this whole enterprise was a book that I found
that was published in 1758, called Le Dictionnaire de la Police
and it's a beautiful folio volume from the 18th century.
And I was leafing through it and it's a thick book that covers all of the policing
that was done in Paris in the 18th century.
And there was a lot of it.
And when I got to the entry for markets, it simply said, see police.
And so the idea was that in the 18th century at least the idea of the author of the dictionary
and the prevailing notion was that these markets were extremely policed.
So policed in fact that you wouldn't even define what a market is,
you would simply refer to the entry for policing.
This is something else that really contributed to this book was some research
that I was doing at the Chicago Board of Trade.
And of course the Chicago Board of Trade is this swarming colorful place where that we go to
and we look at and we look at it and we think this is the free market.
From its inception in the 19th century, the beginning of the 19th century the Chicago Board
of Trade has been regulated through and through.
The birth of the penitentiary in the beginning of the 19th century and then the growth
since 1970 have all been associated with periods when in some sense the logic
of the market has been at its peak.
So the penitentiary was actually born at the beginning of the 19th century during a period
that we refer to as the market revolution, historians refer to it as the market revolution.
And then we see after stability for 50 years, 60 years, we see the prison populations beginning
to start exploding with what we tend to call neoliberalism or the post 1970's period.
So what I did in the book was try to trace this idea of an efficient market,
or a contemporary idea of an efficient market and to seek where it was born.
And so that took me to the 18th century physiocrats who were the first,
one of the first economists, set of economists in France, particularly Francois Quesnay
and to this idea they had of natural orderliness,
natural orderliness in the economic domain.
For them it was predominantly in the agricultural domain,
but they thought that this space was entirely governed by a natural form of orderliness
that required absolutely no intervention and they came up, actually Quesnay himself came
up with this famous tableau economique, which is the zigzag picture but what it shows is
that the economic exchange is entirely self contained.
That the three columns that the producers and buyers et cetera are entirely contained
and the only way to produce net product is to have no external interference.
So one can trace, not only the efficient market back to these notions of natural orderliness
but one can also trace the juxtaposition or the paradox of natural orderliness in economics
and a strict policing all the way back to the 18th century.
At all of the junctures they were born together and throughout the 19th century
and into the 20th century and still today they, in some sense are bound together
in this practically subconscious way.