Michael Perelman, Railroading Economics: The Creation of the Free Market Mythology, Monthly Review Press, 2006, 238 pages, $20.00
Railroading Economics by Michael Perelman is an indictment of economists. But the indictment is not, thankfully, the familiar rehearsal of untenable assumptions or a mathematical proof of error, useful as they may be. Perelman shows, rather, that economists learned from the railroads that "[m]arket-based, marginal cost pricing will create chaos, as the corporatist economists learned a century ago."
The book begins with a description of how economists realized the destructive nature of market forces in the era when railroads were the largest industry in the USA. That description alone is worth the price of the book because, of course, the lesson fully applies to pharmaceuticals, software, and many other industries today.
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