Ray Fisman and Tim Sullivan’s first book, The Org: The Underlying Logic of the Office, served as both a powerful critique of how organizations and a spirited defense of what organizations can do. Their new followup, The Inner Lives of Markets: How People Shape Them – and They Shape Us, goes even deeper and lays bare the markets that make all those orgs possible.
The basic idea behind The Inner Lives of Markets is that markets encompass much more than what we usually think they do and that they’re much more than financial: they’re contracts for how to behave, with wide-reaching implications when the rules change or are ignored, as happens all the time.
Perhaps the greatest delight about this book is that it brings to the fore most of what we hope for in post-Freakonomics business books: engrossing examples ranging World War II prison camps to neck tattoos, medieval markets to how even a hardcore socialist can see the benefits of a market. And it does this while skipping what’s become too common in popular business lit: overarching theories that go way beyond the results, stories shoehorned in for entertainment value rather than service to a larger idea. Indeed, what’s most impressive about The Inner Lives of Markets is its authors’ humility, even about the limits of the markets they celebrate. By being sober about its findings and connections, the book gains authority.