Readings in Applied Microeconomics: The Power of the Market
Edited by me. Forthcoming, but available for Fall '09 courses. Or if you don't want to adopt it, buy a dozen or two to give as gifts. (Or use it as a doorstop; as I understand my contract, I'll be paid the same.)
Includes some classics: Hayek's "The Use of Knowledge"; "I, Pencil"; two seminal articles by Demsetz; Klein and Leffler. Includes some underappreciated work: two chapters from Maurice and Smithson's The Doomsday Myth; Baumol's 1980 piece on incentives and economic growth; David Hemenway's history of the New York City ice cartel (and its failure). And includes some very cool more recent writing: Steven Horwitz's fine essay on who helped most after Katrina; John Lott on how radio solved its seemingly intractable public good problem; and Ronald Bailey on increasing returns.
A summary, the table of contents, and the preface are here (.pdf file).
Note: the book has nothing about our current financial problems. Those and some other alleged market problems--unsustainability, anti-community, systematic irrationality--will be addressed in the sequel, if there is one.