What Makes Markets Tick: The Rules of Adam Smith

This Financial Times video reviews the rules of Adam Smith and what makes markets successful

Rule #1. Markets work best when as many people as possible are involved

Rule #2. Markets are most efficient when prices are transparent to many participants

Rule #3. Managers must have a stake in the business and bear responsibility if something goes wrong

Rule #4. Money is embedded in morality and social relations

For discussion

How have these rules been violated in modern financial markets?

Why would some of these rules be easier to follow in markets dominated by small business than in markets dominated by large corporations?

How does the complexity of modern financial markets make these four rules difficult to follow?