Wednesday, February 18, 2004
What he said.
Juan non-volokh on so called market failure.
I would also note that the existence of a "market failure" -- in this case the under-provision of positive, education-related externalities -- does not, in itself, justify government intervention. For while markets may fail to produce theoretically optimal outcomes, so too do government programs. The relevant comparison must always be between the admittedly imperfect private marketplace and the equally -- if not more -- imperfect government alternative. Too often, the assertion of market failure is taken as sufficient justification for government action without any consideration of whether the policy proposal in question, as it is likely to be implemented in the real world, will actually produce a superior net result.
Juan non-volokh on so called market failure.
I would also note that the existence of a "market failure" -- in this case the under-provision of positive, education-related externalities -- does not, in itself, justify government intervention. For while markets may fail to produce theoretically optimal outcomes, so too do government programs. The relevant comparison must always be between the admittedly imperfect private marketplace and the equally -- if not more -- imperfect government alternative. Too often, the assertion of market failure is taken as sufficient justification for government action without any consideration of whether the policy proposal in question, as it is likely to be implemented in the real world, will actually produce a superior net result.
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