The financial crisis invalidated a naïve notion of efficient markets, but the most sophisticated version is still viable. Whereas the invalidated version holds that markets never err and always adjust instantaneously, the sophisticated version, associated with the ideas of Adam Smith and F. A. Hayek, holds that markets mobilize individuals to realize gains from trade and to innovate and thereby produce generalized prosperity.
|Other Independent Review articles by Peter J. Boettke|
|Winter 2014||Fearing Freedom: The Intellectual and Spiritual Challenge to Liberalism|
|Spring 2006||The Political Economy of Stalinism|