The Failures of Markets: Capitalism’s Original Sin

We find new health risks from air pollution all the time. Shocker. (Source: https://www.rtmagazine.com/disorders-diseases/chronic-pulmonary-disorders/copd/air-pollution-increases-copd-risk-speeds-aging-process/)

Going Beyond Incentives and Signals

  1. The assumptions underlying the notion of the free market are unrealistic and fail
  2. Externalities are inevitable and cannot truly be fully internalized
  1. The Liberal Paradox demonstrates pareto-efficiency is logically incompatible with the Individualist ideals that the market needs to even exist in the first place
  2. Pareto-efficiency is no guarantee of any kind of social good
  3. The “firm as transaction cost mediator” theory that attempts to defuse the notion of “market failures” therefore fails, as it ultimately relies on pareto-efficiency as being optimal

The Inevitability of Market Failures

Free Market Assumptions are completely unrealistic.

  1. “Perfect Information” (or something approximating it)

Externalities are Inevitable

Market Efficiency Isn’t Even Ideal in the First Place!

The Liberal Paradox

  1. be committed to a minimal sense of freedom,
  2. always result in Pareto Efficiency (a state in which you cannot make person better off without making another worse off), and
  3. be capable of functioning in any society whatsoever
  1. “Preferences are not Nosy” (i.e. people’s preferences no longer depend on the choices of others)

Pareto-Efficiency isn’t Necessarily Good in the First Place!

Is the “Transaction Costs” Notion a Way Out for Market Apologists?

Conclusion: “Fixing” Markets Requires Too Much Centralized Power. So What do we Do?

--

--

--

Building Post-Liberal Theory. 🌲 🏴‍☠️.

Love podcasts or audiobooks? Learn on the go with our new app.

Recommended from Medium

Why are stocks on a rampage?

Where does the Market go when nothing is happening?

The Future of Work: Co-op’s

Market Remains Under-Invested

The jobs situation comes back into focus

Scenario B: Rising Tide Lifts Many

Flip or Flop? What Home Flipping Shows Don’t Tell You | Charity-Joy Acchiardo

Is it time to be afraid?

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Apex

Apex

Building Post-Liberal Theory. 🌲 🏴‍☠️.

More from Medium

We are all just panicking.

Work policies that put people first are long overdue.

Graphic: Summer of Soul | Every Friday until September 2nd, we’ll be off work to do things that fill our souls.

1 Question Every Teacher Needs To Ask Themselves

create your world