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Tuesday, June 18, 2013

Free, Unregulated Markets are Not Always the Answer: Seven Important Examples of How Markets Can Fail

We are, as they say, live:

7 Important Examples of How Markets Can Fail

Not sure what happened, but the second paragraph of the introduction to the column is missing [Update: this is fixded]. It should be:

7 Important Examples of How Markets Can Fail: Many people on the political right believe that free markets are the solution to most any problem. For example, Senator Pat Roberts (R-KS) introduced yet another attempt to repeal Obamacare with a call to “start over … with true, market based reforms.”
However, free, unregulated markets are not always the answer. It’s true that competitive markets have desirable properties, but very special conditions must be present for competitive markets to emerge. When these conditions are not met, as is often the case in the real world, free markets can perform very poorly. In these cases – as illustrated in the following examples – government intervention that eliminates troublesome “market freedoms” can often be used to move these markets closer to the competitive ideal.
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