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Re: Madness: Bailing Out Greed in Wonderland
From: David Farber <dave () farber net>
Date: Thu, 18 Sep 2008 09:57:04 -0400



Begin forwarded message:

From: "Dave Wilson" <dave () wilson net>
Date: September 18, 2008 8:04:07 AM EDT
To: dave () farber net
Cc: ip <ip () v2 listbox com>
Subject: Re: [IP] Re: Madness: Bailing Out Greed in Wonderland

Sigh. From http://en.wikipedia.org/wiki/Market_failures

"There are many examples cited by economists as examples of market failure. For instance, traffic congestion is considered an example, since driving can impose hidden costs on other drivers and society, whereas use of public transportation or other ways of avoiding driving would be more beneficial to society as a whole.[1] Other common examples of market failure include environmental problems such as pollution or overexploitation of natural resources.[1] "

And I, speaking solely for myself, will provide an even *better* example, one that I am all too familiar with. Free market theory declares that, because the public is aware that Microsoft's Windows operating system is known to be less secure than other comparable operating systems, and has been known to be so for over a decade, people should have fled Windows for those other operating systems. This has not occurred because Microsoft has monopoly power in the marketplace. This is a classic market failure, created by no government intervention at all (literally, as software developers are completely insulated from, for example, being sued by users for selling a product that does not actually work properly or is dangerous or even kills somebody, unlike, say, everything else you can buy).

Next...



-dave

On Thu, Sep 18, 2008 at 6:41 AM, David Farber <dave () farber net> wrote:


Begin forwarded message:

From: Vadim Antonov <avg () kotovnik com>
Date: September 17, 2008 8:39:17 PM EDT
To: David Farber <dave () farber net>
Cc: ip <ip () v2 listbox com>

Subject: Re: [IP] Re:      Madness: Bailing Out Greed in Wonderland


Dave - for IP if you wish.

From: Russ Nelson <nelson () crynwr com>


My own feeling?  We need separation of markets and state.  You may
gasp "Not possible!  What about market failure?!?"

The reality is that there wasn't a single documented case of market
failure observed in the entire history of mankind. Every case claimed to
be a market failure was conclusively shown to be a result of previous
distortion of the market by political action (granting monopoly
priveleges, suppressing competition by regulation or force, excluding
private interests from controlling some commons, etc).

Some time ago the Wikipedia article on "market failure" had an empty
section for specific real-life examples. As a challenge to the proponents
of market failure justification for political intervention I filled in
this section with a simple statement that none were observed.

Well, the proponents have "corrected" me.  By removing the section
altogether. One would think that if there indeed was an indisputable
example of real-life market failure someone would've provided it, thus
settling the argument conclusively.

--vadim






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