EH.Net Mailing List Archive: HES

> How about the fallacy (or whatever, respecting some  
> recent comments) of "market failure."     
> Markets are social constructs (society agrees   
> on and enforces what constitutes property, contract,  
> tort, etc.);   
> Fred Carstensen  
  
To analyze "market failure," we need to distinguish a  
pure free market from today's mixed economies.  
Many of today's social and economic woes may be caused  
by governmental intervention rather than the market,  
and perhaps would not be present in a pure free  
market.  
  
Today's social constructs create interventions into  
markets, and so the consequent social problems cannot  
be ascribed purely to "market failure."  
  
>  If   
> "markets" fail to do so, what or who has failed?   
  
Each failure (e.g. unemployment, pollution) has to be  
analyzed to determine how intervention affects the  
outcome.  To label all of today's failures as market  
failure is to assert that all government policy is  
purely benign.  
  
Fred Foldvary