Monopolies that underproduce/underinnovate. The 2008 crash involved a combination of a principal-agent problem (between mortgage underwriters and the ultimate

Monopolies that underproduce/underinnovate. The 2008 crash involved a combination of a principal-agent problem (between mortgage underwriters and the ultimate sources of capital that bought the CDOs) and the limits of the market as a transmitter of reliable information. The market does not by default transmit its signals in a way that humans respond optimally to (not even from the point of view of their interests). e.g. people discount the future gas savings of a slightly more expensive car in a way that implies an implicit interest rate much higher than the actual one. The market assigns the power to consume (money) in ways that do not reflect actual human values - i.e. the decision that someone whose skills are in demand should be able to consume 4x what their neighbor can, rather than 2x, is not a question of efficiency but of values, and when it comes to the high and low ends the market's values are inhuman.