The Rules of the Game

The story inside

1. Part 1Supply, Demand, and Markets

   It starts in a pin workshop, where Adam Smith counted ten workers turning out 48,000 pins a day and asked a question nobody had asked before. From there the markets fill up: a salt tax the French crown imposed around 1341 that survived more than four centuries, a young man from Cleveland who went from one refinery among many to 90 percent of the oil refined in the United States in ten years, and a tulip bulb that sold in Haarlem for the price of a house in Amsterdam.

2. Part 2Microeconomics

   Then the people inside the markets. A California supermarket set up a tasting stand with twenty-four jams one day and six another: which display sold more? A thirteen-page paper about used cars was turned down by two journals as trivial, and in 2001 it won its author the Nobel. What had everyone else missed?

3. Part 3Macroeconomics

   Finally, whole countries. In the early 1960s South Korea, with no significant natural resources, had an income per person comparable to Ghana’s, while Nigeria sat on enormous oil reserves. In 1930 more than a thousand economists asked President Hoover to veto a tariff on more than 20,000 products, and he signed it. And a sixteen-year-old king of Bhutan declared that Gross National Happiness is more important than Gross National Product.