The Importance of Understanding the Mechanism of Peaceful Global Cooperation

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Russ Baker: Hayek says in order to understand why things might, and sometimes do, go wrong, we first have to understand why they work. If we don't fully appreciate this marvel of the self-organized or emergent order-based market, all the talk about market failure is just off base, he says. Baker: I'm increasingly distressed that the almost pedestrian way in which modern economists think they understand the way markets work doesn't get it.

Why is it that people in large cities like Paris or New York City people sleep peacefully, unworried about whether there will be enough bread or other necessities available for purchase the next morning? No one is in charge--no bread czar. No flour czar. And yet it seems to work remarkably well. Don Boudreaux of George Mason University and Michael Munger of Duke University join EconTalk host Russ Roberts to discuss emergent order and markets. The conversation includes a reading of Roberts's poem, "It's a Wonderful Loaf."