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The Myth of the Free Market: The Role of the State in a Capitalist Economy

Mark A. Martinez
The Myth of the Free Market: The Role of the State in a Capitalist Economy
ISBN: 978-1-56549-284-4
ISBN: 978-1-56549-267-7
ISBN: 978-1-62637-371-6
2009/319 pages/LC: 2008053510
A Kumarian Press Book
Also of interest: A Civil Republic: Beyond Capitalism and Nationalism by Severyn T. Bruyn
"Strongly recommended for both academics and non-academics with interest in economic policy."—Voluntas

"Thoughtful and erudite.... Mark Martinez forces us to re-examine the myth of the 'natural' free market order."—Ha-Joon Chang, University of Cambridge

"A fast-moving primer bursting with relevant examples, The Myth of the Free Market is—to put it mildly—eye-opening. Mark Martinez's insight could not have arrived at a more important time. Compelling from cover to cover."—Bill Harnsberger,  Daily Kos

"A timely, insightful, and controversial work reexamining the centuries-old conundrum of the proper balance between free market capitalism and role of government in our market economy."—Henry Lowenstein, Coastal Carolina University

"Provides a rich array of cases and a compelling argument for the central role of the state, and politics, in the development of markets."—Lia Roberts, Mount St. Mary's College

"Martinez provides a much-needed and welcome antidote to the free market mania that has dominated policymaking circles over the last thirty years.... Government's powerful protection of markets is discussed in broad historical terms, specific case studies, and thought-provoking analysis that connects perfectly with the current realities of our troubled economy and financial markets."—Peter H. Loedel, West Chester University


Mark Martinez reveals how the myth of the "invisible hand" has distorted our understanding of the development and actual performance of modern capitalist markets.

Martinez draws on historical cases to make it clear that political processes and the state are not only instrumental in making capitalist markets work, but that there would be no capitalist markets or wealth creation without state intervention. Then bringing his story up to the 2008 market collapse and its immediate aftermath, he relates how the seeds of unprecedented government intervention in the financial markets were sown in the past.


Mark A. Martinez is professor of political science at California State University, Bakersfield.


  • Introduction: Understanding Markets and States.
  • Things to (Re)consider.
  • Milton Friedman Got It Wrong: Politics is at the Heart of Capitalism.
  • Free Markets and Wealth (Re)Considered.
  • The Role of the State in Creating Market Capitalism.
  • The Very Political Roots of Market Capitalism: Embracing Individual Achievement and Vanity.
  • Manias and the Philosopher's Stone: The Road to Wealth and Regulated Money.
  • Making Markets Work in Practice: The State in Action.
  • War Made the State and the State Made War.
  • How Medieval Organized Violence Led to Mercantilism, Middle-Class Bargains, and Market Capitalism.
  • Toward "Freer" International Trade.
  • America's Post–World War II Grand Liberal Strategy.
  • States and Modern Markets: From Political Money to Wall Street Socialism.
  • From Keynes to Deregulation and Exploding Capital Flows.
  • An Empire of Debt: Violating Adam Smith's Laws of Nature?
  • The Deregulation Game.
  • From Deregulation to the Mother of All Bailouts.