“Keynes tried to show that market economies could settle in equilibrium states in which the labour market did not clear, and in which the level of unemployment was high. He believed that this was due to a particular example of market failure, developed in his concept of effective demand.”

— Paul Ormerod, book The Death of Economics

Part II, Chapter 7, Attractor Points, p. 140
The Death of Economics (1994)

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English economist

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“Keynes did not challenge the efficacy of price adjustment mechanisms in clearing particular markets in the Marshallian partial equilibrium theory on which he had been reared. He did challenge the mindless application of those mechanisms to economy-wide markets. Founding what came to be known as macroeconomics, he was modeling a whole economy as a closed system. He knew he could not use the Marshallian assumption that the clearing of one market could be safely described on the assumption that the rest of the economy was unaffected.”

James Tobin (1918–2002) American economist

"Price Flexibility and Output Stability: An Old Keynesian View" (1993)

“The parallel existence and mutual interaction of "state" and "market" in the modern world create "political economy"; without both state and market there could be no political economy.”

Robert Gilpin (1930–2018) Political scientist

Source: The Political Economy of International Relations (1987), Chapter One, Nature of Political Economy, p. 8

“I know that some people in the U. S. associate the Nordic model with some sort of socialism… Therefore, I would like to make one thing clear. Denmark is far from a socialist planned economy. Denmark is a market economy… The Nordic model is an expanded welfare state which provides a high level of security to its citizens, but it is also a successful market economy with much freedom to pursue your dreams and live your life as you wish.”

Lars Løkke Rasmussen (1964) Danish politician

"Nordic Solutions and Challenges: A Danish Perspective" http://www.vox.com/2015/10/31/9650030/denmark-prime-minister-bernie-sanders (October 2015), speech to Harvard's Kennedy School of Government. <br class="br">2010s, 2015

“In the Autumn semester, 1955, I taught Principles of Economics, and found it a challenge to convey basic microeconomic theory to students. Why/how could any market approximate a competitive equilibrium? I resolved that on the first day of class the following semester, I would try running a market experiment that would give the students an opportunity to experience an actual market, and me the opportunity to observe one in which I knew, but they did not know what were the alleged driving conditions of supply and demand in that market”

Vernon L. Smith (1927) American economist

Vernon L. Smith (2002) in: " Vernon L. Smith - Biographical http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/2002/smith-bio.html". Nobelprize.org. Nobel Media AB 2013. Web. 13 Jun 2014.

“We need to recognise that the entire information sector—from music to newspapers to telecoms to internet to semiconductors and anything in-between—has become subject to a gigantic market failure in slow motion. A market failure exists when market prices cannot reach a self-sustaining equilibrium. The market failure of the entire information sector is one of the fundamental trends of our time, with far-reaching long-term effects, and it is happening right in front of our eyes.”

Eli Noam (1946) professor of Finance and Economics at the Columbia Business School

Eli Noam in: " Eli Noam: Market failure in the media sector http://www.citi.columbia.edu/elinoam/FT/2-16-04/MarketFailure.htm" at news.ft.com, February 16 2004 <br class="br">The context of this quote was a digression on the media, telecommunication, information technology, and internet industries.

“Market power and externalities are examples of a general phenomenon called market failure—the inability of some unregulated markets to allocate resources efficiently. When markets fail, public policy can potentially remedy the problem and increase economic efficiency. Microeconomists devote much effort to studying when market failure is likely and what sorts of policies are best at correcting market failures. As you continue your study of economics, you will see that the tools of welfare economics developed here are readily adapted to that endeavor. Despite the possibility of market failure, the invisible hand of the marketplace is extraordinarily important.”

N. Gregory Mankiw (1958) American economist

Source: Principles of Economics (1998-), Ch. 7. Consumers, Producers, and the Efficiency of Markets; p. 150

“The stock market is not the economy, and the economy is not the stock market.”

Kai Ryssdal (1963) Radio host, United States Navy officer

repeatedly on his radio program " Marketplace APM https://www.marketplace.org/2019/09/30/the-stock-market-is-not-the-economy/" (September 2019)

“Market economy implies a self-regulating system of markets; in slightly more technical terms, it is an economy directed by market prices and nothing but market prices.”

Karl Polanyi book The Great Transformation

The Great Transformation (1944), Ch. 4 : Societies and Economic Systems

“The particular interests of the entrepreneurs and capitalists also demand interventionism to protect them against the competition of more efficient and active men. The free development of the market economy is to be recommended, not in the interest of the rich, but in the interest of the masses of the people.”

Ludwig von Mises (1881–1973) austrian economist

Ch. VII : The Economic, Social, and Political Consequences of Interventionism § 1. The Economic Consequences https://fee.org/resources/interventionism-an-economic-analysis-2#economic <br class="br"> Interventionism: An Economic Analysis https://fee.org/resources/interventionism-an-economic-analysis/ (1940) <br class="br">Context: The unhampered market economy is not a system which would seem commendable from the standpoint of the selfish group interests of the entrepreneurs and capitalists. It is not the particular interests of a group or of individual persons that require the market economy, but regard for the common welfare. It is not true that the advocates of the free-market economy are defenders of the selfish interests of the rich. The particular interests of the entrepreneurs and capitalists also demand interventionism to protect them against the competition of more efficient and active men. The free development of the market economy is to be recommended, not in the interest of the rich, but in the interest of the masses of the people.

“Plainly, the most powerful exception to the notion of a voluntary excahnge in a market economy is the labor market. The existence of a market for labor is one of the distinguishing features of a market economy: workers compete to sell their labor at the most favorable price—meaning, in practice, the highest possible wage. At the same time, however, it is clear that the market for labor is qualitatively different from the market for goods, because workers need to sell their labor to survive.”

Mimi Abramovitz (1941) non-fiction writer

Joel Blau and Mimi Abramovitz, The Dynamics of Social Welfare Policy (Oxford University Press: 2010) p. 68

“Keynes tried to show that market economies could settle in equilibrium states in which the labour market did not clear, and in which the level of unemployment was high. He believed that this was due to a particular example of market failure, developed in his concept of effective demand.”

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