.. the policy conclusion should be that we should allow the greatest scope to come to enforceable co-operative agreements with others (in this respect, one thinks of the huge networks of co-operation that existed in private stock exchanges or of the way in which football is organised, but there many other examples). The market provides a great forum for co-operation. Competition is the process by which the best forms of co-operation are discovered and are copied. But it is true that enforceability is vital, though enforceability could be by tacit means (exclusion from future ventures to the bar) as well as explicit means (legal action for breach of contract).
Very often, of course, government prevents such co-operation ..
.. co-operation in the market may not always produce the theoretically optimal result. But, the market is the forum where people will solve these problems most effectively. As von Mises said in Human Action, markets are places where people are ‘competing in co-operation and co-operating in competition’ in order that people can find the position from which they can best serve society. The idea that regulators can centralise all the necessary knowledge and act purely in the public interest (and not be captured by outside interests) suggests that the alternative of government regulation to promote the optimal outcomes is not promising. After all, with regard to the financial crash, some people say that banks were over-regulated; some say that they were under-regulated; some say that they were badly regulated ..
.. Government regulators have, though, bull-dozed private regulatory mechanisms that might have been more effective. It is imperative that theoretical economics professors consider wider political economy issues, otherwise they will jump to dangerous reductionist conclusions from ground-breaking work that has subtle implications.