As children, we’re fed a series of white lies and untruths: Carrots help you see in the dark. Cracking your knuckles leads to arthritis. Watching too much TV will turn your eyes square.
As adults, we’re told a different set of fibs: Politicians have our best interests at heart. Trickle-down economics works. Hard work always pays off. And then there is, perhaps, the greatest falsehood of them all: The market sets the price.
We are taught that in a capitalist free-market economy, prices for goods and services are determined solely by the invisible hand of supply and demand. That sacred phrase “the market sets the price” is etched into every economics textbook, every political speech, and every justification for soaring prices or stagnant wages.
But that idea, like Santa Claus watching who’s naughty or nice, falls apart under scrutiny.
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