Sunday, November 16, 2008

Competition and Free Markets and Rationality

Two pieces in the NY Times today relating to a market-based economy.

Robert FRank writes on whether competition in free markets does away with discrimination. He argues, it doesn't, except in cases where the markets are very good and very competitive. That may have been the case in the 2008 election. He cites Jackie Robinson as a case
"During Mr. Robinson’s 10-year career with the team, the Dodgers went to six World Series and he was voted to the National League All-Star team six times. In retirement, he was elected to Baseball’s Hall of Fame on the first ballot. Shortly after Mr. Robinson’s arrival in the major leagues, it became clear to all that failure to field the best possible team, irrespective of color, was a sure recipe for failure."
As a youthful Yankees fan (who only knew his older sister rooted for the Dodgers), I beg to differ--the Yankees mostly beat the Dodgers, despite Jackie (and Roy, and Junior, and Newk, et. al) in the Series throughout the 40's and 50's, even though they were very late to integrate their team. So it wasn't "clear to all" at the time. And irrational prejudice overrode reason.

And in the Week in Review, there's an article discussing research on the role of testosterone and cortisol (i.e., maleness) in the ups and downs of market. An academic believes "raging hormones might explain why the men who rule the global markets send them rocketing up when they’re on a roll, and swooping down when they get scared, exhibiting judgment that can remind you of the guys in an Adam Sandler movie."

Makes sense to me.

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