loading . . . The Return of the Nirvana Fallacy: A Review of John Cassidyâs Capitalism and Its Critics (Forthcoming Article) - John Cassidy's <i>Capitalism and Its Critics</i> surveys 250 years of capitalism's history through the eyes of roughly thirty critics, from the Luddites, early utopians and Marx to modern communitarians, antigrowth proponents, free trade opponents, and scholars of inequality. The result is a vivid, sympathetic reconstruction of left-of-center dissent. We argue, however, that the book reproduces two analytical weaknesses shared by the critics it profiles. First, it commits Harold Demsetz's Nirvana Fallacy, evaluating imperfect real-world markets against idealized regulatory alternatives rather than against equally imperfect real-world governments. Second, it underestimates capitalism's most distinctive self-correcting mechanisms: endogenous technological change and entrepreneurial creative destruction, all coordinated by the price system. The result is a catalogue of capitalism's failures unaccompanied by any comparable accounting of the alternatives. https://www.aeaweb.org/articles?id=10.1257/jel.20261827&from=f
