A masterful introduction to the key ideas behind the successes-and failures-of free-market economics

Since 1946, Henry Hazlitt’s bestselling Economics in a single Lesson has popularized the fact that economics can be boiled down to one particular lesson: market prices represent the real cost of everything. But one-lesson economics tells only half the storyplot. It can explain why markets often work so well, nonetheless it can’t describe why they often fail so badly-or what we should do if they stumble. Simply because Nobel about Economics in Two Lessons: Why Marketplaces Work so Well, and just why THEY ARE ABLE TO Fail So Terribly Prize-winning economist Paul Samuelson quipped, ‘When someone preaches ‘economics in one lesson,’ I recommend: return back for the second lesson.’ In Economics in Two Lessons, John Quiggin shows both lessons, offering a masterful launch to the main element suggestions behind the successes-and failures-of free of charge markets.

Economics in Two Lessons explains so why marketplace prices often neglect to reflect the entire cost of our options to society all together. For example, every time we get a car, take flight in a plane, or flick a light change, we contribute to global warming. But, in the absence of a price on carbon emissions, the costs of our activities are borne by everybody else. In such cases, government action is needed to achieve better results.

Two-lesson economics means quitting the dogmatism of laissez-faire aswell as the reflexive assumption that any economic problem could be resolved by government action, because the right answer often involves an assortment of market forces and federal government policy. However the payoff is certainly huge: focusing on how markets actually work-and what to do if they don’t.

Brilliantly accessible, Economics in Two Lessons unlocks the essential issues at the heart of any kind of economic question.