A quick question for AC Peeps: Market failure

[kniper]

Do you guys ever believe in market failure (assuming the government is not involved)? Ever ever? Please explain if so or if not with examples preferably (or MSPaint).

[ShakeZula06]

My take is that for fundamental reasons, the market is better at solving problems then the state. A lot of people on the forum throw a lot of convulted "what ifs" at us regarding issues in an AC society. What they fail to realize more often then not, is that the state is far worse at solving whatever problem brought up, and many times is counter-productive at solving whatever problem it is.

A free market is simply individuals acting in a voluntary manner to solve problems. If you identify a problem, or a way to improve society, you take that good or service to the market. If it is a problem, your good or service makes you money and benefits society.

I believe for fundamental reasons that privatization of property, resources, production, and with voluntary contracting and voluntary solutions solves whatever "what if" could come in society better then a coercize, imposing territorial monopoly.

So in that sense no I don't believe in market failures.

[Borodog]

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Do you guys ever believe in market failure (assuming the government is not involved)? Ever ever? Please explain if so or if not with examples preferably (or MSPaint).

[/ QUOTE ]

No; there is no such thing as "market failure." Market failure is the excuse that socialists trot out to explain why something that *they personally* want to see more of is not supplied in greater quantities by the market. There is no way, independent of the market itself, to look around the market and *objectively* claim that "there is not enough X being produced". If there really were not enough X being produced, i.e. demand outstrips supply, the profit for producing and supplying X would rise relative to other lines of production, and invite investment in producing and supplying X.

A neat trick by governments, however, is to artificially restrict the supply of X, via things like licensure, regulation, taxation, etc. so that the demand really does exceed supply, prices are kept artificially high, but the supply is not allowed to increase in response to the price signals. The government then steps in and declares a "market failure", and uses this excuse to monopolize the provision of that good or service entirely. This is seen over and over again, for example in health care and health insurance. Another famous example is childcare. Make the hoops that you have to jump through to open a childcare business ridiculous, hence keep childcare artificially scarce and expensive so that most parents cannot afford it, and then declare the need for the state to provide daycare and such for parents.

It always helps when you are trying to engineer a "market failure" to make it a crime to supply the thing you want to make it look like is not being supplied.

[latefordinner]

The history of environmental degradation and the destruction of natural capital and calling it a "profit" rather than a "loss" is one giant market failure which will become glaringly apparent to even the most myopic individuals over the next 50 years.

[Borodog]

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The history of environmental degradation and the destruction of natural capital and calling it a "profit" rather than a "loss" is one giant market failure which will become glaringly apparent to even the most myopic individuals over the next 50 years.

[/ QUOTE ]

See, this is exactly what I mean. Make sure that your monopoly courts refuse to recognize property rights that would avoid tragedies of the commons (since there can only be tragedies of the commons where there are commons) and outlaw legal actions that would act to internalize costs, and then get yahoos on the intarwebs to call it a "market failure."

[tolbiny]

[ QUOTE ]
Do you guys ever believe in market failure (assuming the government is not involved)? Ever ever? Please explain if so or if not with examples preferably (or MSPaint).

[/ QUOTE ]

You have to define a market failure first, and once you do you will see why its essentially an oxymoron for there to be one. The market is simply a description of the methods people use to ameliorate the problems associated with limited resource problems. I want, but don't have, X therefore I must either produce it myself or trade something I do have for it. Both of these two things involve costs. To make a glass bottle you must spend a lot of time and energy despite the fact that its main ingredient can be found lying around in vast quantities. So now you have to weigh weather or not it is worth producing that glass, or weather it is worth trading what you have produced for it. If i choose not it doesn't mean that there was a market failure it means that I judged the cost to be to high.

[Iq75]

To all,

so what’s the AC solution to private monopolies, cartels and such? Without a state the market operators would consolidate and that would prevent the markets to work in the most efficient way.

[BCPVP]

[ QUOTE ]
To all,

so what’s the AC solution to private monopolies, cartels and such? Without a state the market operators would consolidate and that would prevent the markets to work in the most efficient way.

[/ QUOTE ]

[latefordinner]

[ QUOTE ]
See, this is exactly what I mean. Make sure that your monopoly courts refuse to recognize property rights that would avoid tragedies of the commons (since there can only be tragedies of the commons where there are commons) and outlaw legal actions that would act to internalize costs, and then get yahoos on the intarwebs to call it a "market failure."

[/ QUOTE ]

sorry if I don't automatically accept your assertions that every awful outcome of state capitalism is from the state part and not the capitalism part.

Our ability at this point to effect environmental change on such a broad scale makes the thought of 10,000 class action suits against companies for contributing to 2.33% of my cancer and 5.88% of the reason all the frogs are dead in my pond is quaint though.

[Borodog]

[ QUOTE ]
To all,

so what’s the AC solution to private monopolies, cartels and such? Without a state the market operators would consolidate and that would prevent the markets to work in the most efficient way.

[/ QUOTE ]

No, they wouldn't. This is a tired old myth.

The Protectionist Roots of Anti-Trust
Cartels

Search All Forums, something like +barrier +entry +capital + monopoly, my username, going back a couple of years. Read those posts.