Benefit-cost practitioners in the mid twentieth century, forced by government agencies to value outdoor recreation, continued to struggle with how to do so. One outside expert, Harold Hotelling, recommended what became known as the travel cost model. This approach measures the demand for recreation based on how much people are willing to pay for a trip in terms of travel costs. It also measures the value of a trip in terms of consumer surplus, or the additional value recreationists have above the travel costs they pay. Although the method eventually became stardardized, it initially was received with skepticism and confusion. Consumer surplus was an archaic, theoretical construct with little grounding in realty. This chapter discusses how economists like Marion Clawson and Jack Knetsch overcame their skepticism.

In many countries, the analysis of economic coordination--for the purposes of competition law and otherwise--has been dominated by neoclassical economics. Building on heterodox economics and economic sociology, this chapter outlines an alternative perspective--a “market governance” framework--to make sense of the coordination of economic actors--including workers--with a focus on pricing decisions. The framework treats prices as always subject to the coordinating activities of market participants, and never emerging out of “free competition”, which is an illusion. Several implications of the account are sketched, including a reinterpretation of several domains that are commonly taken to be “free markets” and a critical reexamination of the contemporary approval of the “efficiency” of hierarchical centralized coordination in enormous multinational corporations.

Financial crises are widely perceived to be the reason monetary rules cannot work. The extraordinary challenges posed by crises require policymakers to act discretionarily. We show that this argument is not only wrong but backward: It is more important than ever to have true rules for monetary policy, which actually bind, to cope with financial crises. We show how the Fed failed to respond appropriately to the 2007–2008 crisis. Contrary to the then chairman Bernanke’s public statements, the Fed did not behave as an orthodox lender of last resort. Instead, it experimented with dubious policies that further entrenched moral hazard in the financial system. We criticize these policies, as well as an approach to economics, which we call “triage economics,” that mistakenly supposes the basic rules of price theory provided no guidance in crafting policy responses to crises. A rules-based approach to monetary policy is thus consistent with extreme market turbulence. In fact, rules are how such turbulence is pacified.

Chapter 2 examines Burke’s fundamental beliefs on market economies. I first provide an outline of the agricultural economy in late eighteenth-century England in order to draw a specific historical context for Burke’s economic thought during that period. Then I use Thoughts and Details to explain his commentary on market liberty. I discuss Burke’s support for a free domestic grain trade; government restraint; supply and demand laws; and the competitive price system. For Burke, the internal grain market should be largely protected from state intrusion. The silent efficiency of supply and demand laws channeled provisions to communities without requiring the hand of government. Prices of goods should be determined by the market, not by magistrates, who lacked the knowledge of local market conditions necessary to establish equitable prices and create fair labor contracts. I also investigate Burke’s firm defense of middlemen in Thoughts and Details, and describe his efforts in 1772 to repeal long-standing statutes that had banned the middlemen trading activities of forestalling, regrating, and engrossing. According to Burke, middlemen played a crucial role in the provisions trade by helping promote the smooth distribution of goods and lower prices.