Conclusion

Abstract

I here survey the content of the book. In Chap. 2 I demonstrate that Adam Smith argued for allowing the self-interest of individuals to be the motor of the new efficient free market economy. Adam Smith saw a modest role for the government to deal with roads and education. I argue that this insight leads to the need to develop the concepts of public and merit goods. I develop those concepts in Chap. 3. In Chap. 4 I develop eleven domains where the government has a regulatory function. I call them the eleven categories of merit goods. In the last chapter I show, on the basis of the writings of Rajan, Reich and Reinhart and Rogoff, that the financial crisis 2007–2008 and the subsequent recession can be explained by deficient governmental actions in seven of the eleven merit good categories.