My teachers helped guide and motivate me; but the responsibility of learning was left with me. - Joseph E. Stiglitz

The theories that I (and others) helped develop explained why unfettered markets often not only do not lead to social justice, but do not even produce efficient outcomes. Interestingly, there has been no intellectual challenge to the refutation of Adam Smith’s invisible hand: individuals and firms, in the pursuit of their self-interest, are not necessarily, or in general, led as if by an invisible hand, to economic efficiency. The only question that has been raised concerns the ability of government to remedy the deficiencies of the market. Within academia, a significant fraction of economists are involved with developing and expanding on the ideas of imperfect information (and imperfect markets) that I explored. For instance, Edmund Phelps, this year’s Nobel Prize winner, belongs to this "school" of thought. But in political discourse, simplistic “market fundamentalism” continues to exert enormous influence.

The standard neoclassical model the formal articulation of Adam Smith's invisible hand, the contention that market economies will ensure economic efficiency provides little guidance for the choice of economic systems, since once information imperfections (and the fact that markets are incomplete) are brought into the analysis, as surely they must be, there is no presumption that markets are efficient.

It should be clear of course that for traders to have incentives to gather information required that information not be perfectly disseminated in the market. If, simply by looking at market prices, those who do not spend money to acquire information can glean all the information that the informed traders who have spent money to acquire information have, then the informed traders will not have any informational advantage; they will not be able to obtain any return to their expenditures on information acquisition. Accordingly, if there were a complete set of markets, information would be so well conveyed that investors would have no incentives to gather information. (Of course with all participants having the same [zero] information, incentives to trade would be greatly reduced.) To put the matter differently, the assumptions of "informed" markets and "a complete set of markets" may be mutually exclusive.