Do market economies make the most of resources to allow the greatest number of people to make the most of their opportunities? David C. Korten, sometime Harvard academic, sometime advisor to a variety of governments of developing nations, argues that they do not. He sets out his case from first principles. He sets up the condemnation to come: "The beliefs espoused by free-market ideologues are familiar to anyone conversant with the language of contemporary economic discourse.....sustained economic growth, as measured by gross national product, is the path to human progress....the action that yields the greatest financial return to the individual or firm also yields the most benefit to society...."

This is a restatement of what Adam Smith wrote near the end of the 18th century. Yet classical economics does not work, Mr. Koren says. Why? Because the world is controlled by "gigantic global corporations," a world consumer culture driving people to seek material gratification, and, of course, the profit motive.

Mr. Korten would like to disenfranchise corporations, turn all power back to the people, shrink the money supply (he wants all checking accounts to be backed 100% by cash in bank vaults or in other reserves), have stock profits taxed by a transactions levy (on losses too?), get financial derivatives curbed, and end by legislation the practice of corporate retention of earnings. The last proposal would wreck business around the world and leave firms continuously dependent on capital markets, but, what the heck. In addition, he wants an end to leveraged buyouts, and, of course, a guaranteed income for those who work and those who don't.

There is little need to worry that much of this will happen. If banks had to maintain 100% reserves on demand deposits, the credit system of the world would collapse, for banks lend out deposits, retaining only small amounts for potential withdrawals. Regulating plastic would be a larger issue, for banks can find themselves with large payment orders that they did not originate, yet would have to find reserves to match them. Practical Mr. Korten is not. Indeed, he seems so far removed from financial markets that he does not know how they work.

This classical American left wing economics. What is remarkable is that it is being published today, for John Kenneth Galbraith, a Canadian export to Harvard and the Kennedyadministration, later U.S. Ambassador to India, said much of this in the 1950s. It did not work then, won't work now, but makes good reading for university students who investigate whether government should replace the market. There is little evidence that bureaucrats can allocate resources better than open and free markets. But the case that they should nonetheless makes a good story.

Read When Corporations Rule the World as a revival of government supremacist thought and as an inventory of what those who want to break markets have on their agenda. In countries where plans to crush banks and companies appear ready to bear fruit, it's time to sell and move on to where markets are allowed to rule. Mr. Korten shows why.