This chapter covers: historical theorizing about what role the state ought to play in an economy; from the mercantilist to the market role; historical fear of a Leviathan government role; government role in France and the origin of the term “laissez faire”; Adam Smith’s alternative view of the “wealth of nations”; the role of the “invisible hand”; Weber’s view of mercantilism and of its role in the growth of the capitalist system; advent of the Industrial Revolution and its need for energy, and also for better use of time; Adam Smith’s view of the role of the state in regulations and also in some redistribution; and the importance of empathy in communities.

This chapter turns to the city as imagined in literary impressionism from the early twentieth century, reflecting on the spectral, ethereal landscape of Singapore as it appears in the fiction of Joseph Conrad. In Conrad’s writing, the neoclassical buildings housing the banks and corporations appear superimposed, rendering Singapore’s grand and solid modernity strangely superficial and insubstantial. As scholars have argued, this works to unsettle the city’s colonial identity as a triumph of modernity and order over primeval jungle, making Conrad’s Singapore an archetypal ‘unreal city’ and a crucial location for the development of urban impressionism. This chapter shows how Conrad not only stages the breakdown of colonial progress but also engages critically with the British laissez-faire discourses framing the city’s foundational identity as a free port. In this way, a connection opens up between his experiments with narrative agency and the city’s own colonial identity as the product of the ‘invisible hand’ of market forces.

Sen considers Adam Smith an ally in the illustration of the logic of the capability approach — i.e. to be ‘able to appear in public without shame’ is a cross-cultural, cross-time capability, while the specific forms of consumption that it requires are variable. The chapter problematizes that Smith’s vision of the market and poverty is consistent with Sen’s. Sen uses that paragraph of The Wealth of Nations as an example of Smith’s general attitude towards wealth, commodities and the market, but such attitude is hard to find in Smith’s whole works. In particular, the chapter does not deny the legitimacy for Sen to quote that particular passage of Smith to show an illustrious antecedent of his capabilities approach. It claims that to have a full idea of Smith’s vision on necessities we need to consider Smith’s theory of the invisible hand, and that Smith’s general philosophy of the market is significantly different from Sen’s, as it emerges from the analysis of Smith’s general vision of commodities and luxury, and then enters into his theory of the market. Such an extension claims to contribute to a more general discussion on the connections between Sen’s and Smith’s vision of political economy.

This Introduction sets out three main aims of the book: give a statistical update of the outcomes in transition; analyze why some countries performed far better than others; and ask a deeper question of why some country leaders chose radical Big Bang reforms, others a Gradual approach. It also defines key terms like socialism, central planning, capitalism markets, shock therapy, Big Bang, privatization, and Invisible Hand. Last, it clarifies the methodology of analysis, country coverage, and statistical sources.

This review essay was original published in the Journal of Bioeconomics in March, 2012. It was initiated by Ulrich Witt, Professor of Economics and Director of the Evolutionary Economics Group at the Max Planck Institute in Jena, Germany. He asked me to write a review of The Darwin Economy: Liberty, Competition, and the Common Good (Princeton University Press) by the economist Robert H. Frank, to which Frank would reply. It was an intense but constructive exchange on some of the most important political and economic issues of our time, most notably solving the “collective action” problem of getting selfish actors in a social system (i.e., each of us individually) to forego what is good for us in the short term for what is good for all of us in the long term.

In the framework of a critical illustration of the contemporary history of economics, this chapter illustrates the various streams of neo-liberalism, from Ordoliberalism to Mises’s new Austrian school and Hicks’s Austrian capital theory, from Friedman and the Chicago school to rational expectations and supply-side economics, from the public choice school to political economics, from the Mount Pélerin Society to the Washington consensus and the idea of expansionary austerity. Step by step, the feeble theoretical and conceptual foundations of this set of theories are critically discussed.

This chapter argues that the big, brainy, intricately structured American novel that goes by the name of the “encyclopedic” or “systems” novel is shaped by an ambivalent relation to the correspondingly capacious, complex, and informationally rich sphere of the financial markets. It begins by tracing the idea of the all-knowing market from Adam Smith to the “efficient market hypothesis” that continues to dominate the discipline of financial economics today, and shows how this intellectual history has intersected with the history of the novel. The chapter challenges the critical consensus that reads the contemporary "big novel" as defined by the determinism of conspiracy plotting, and argues that it is more closely aligned with the contingent – yet collectively synchronized – dynamics of the classically “efficient” market. The latter portion of the chapter shows how major encyclopedic or systems texts – by Thomas Pynchon, William Gaddis, Richard Powers, Jonathan Franzen, David Foster Wallace, and Garth Risk Hallberg – position the omniscient financial market as performing both a redemptive mapping and an oppressive (and aggressively masculine) surveilling of the social totality.

This chapter argues that the big, brainy, intricately structured American novel that goes by the name of the “encyclopedic” or “systems” novel is shaped by an ambivalent relation to the correspondingly capacious, complex, and informationally rich sphere of the financial markets. It begins by tracing the idea of the all-knowing market from Adam Smith to the “efficient market hypothesis” that continues to dominate the discipline of financial economics today, and shows how this intellectual history has intersected with the history of the novel. The chapter challenges the critical consensus that reads the contemporary "big novel" as defined by the determinism of conspiracy plotting, and argues that it is more closely aligned with the contingent – yet collectively synchronized – dynamics of the classically “efficient” market. The latter portion of the chapter shows how major encyclopedic or systems texts – by Thomas Pynchon, William Gaddis, Richard Powers, Jonathan Franzen, David Foster Wallace, and Garth Risk Hallberg – position the omniscient financial market as performing both a redemptive mapping and an oppressive (and aggressively masculine) surveilling of the social totality.