Political Theory

Re: Market Failures, Economic Models and Parento efficiency theory

Jon Irenicus — Sat, 11 Oct 2008 20:15:23 GMT

Here, but I'd recommend you also searched the Mises website on the terms "market failure" and "environmentalism" or "global warming" &c. for additional sources, particularly on Austrian-based forms of market environmentalism, as there's been a lot written on these topics since Rothbard. His text is still instructive for the plumbline Austro-libertarian position though.

-Jon

Re: Market Failures, Economic Models and Parento efficiency theory

Andrew Cain — Sat, 11 Oct 2008 20:13:43 GMT

Can I perhaps get the title of this paper or a link? Because most of what is argument in today economy as "market failures" specifically centers around the environment.

Re: Market Failures, Economic Models and Parento efficiency theory

Jon Irenicus — Sat, 11 Oct 2008 17:51:46 GMT

Yeah, a lot of "market" failures stem from inadequate provision of certain services by government. Common law was at least better in dealing with these things than legislation, and I think Rothbard's paper on pollution and the law is good on this topic.

-Jon

Re: Market Failures, Economic Models and Parento efficiency theory

Andrew Cain — Sat, 11 Oct 2008 11:18:01 GMT

So, the government's failure to say hold a power plant that perhaps dump waste into the surrounding individual's property responsible is the reasoning behind a "market failure"? If that be the case, isn't the point of the Anarchist to not rely on the government for such things? I mean we want no government intervention in the daily lives.

Re: Market Failures, Economic Models and Parento efficiency theory

Jon Irenicus — Sat, 11 Oct 2008 01:37:50 GMT

Pollution, for instance. Many governments refuse to enforce property rights in the name of the "public good", because for instance enforcing them in this case would disadvantage industries which don't want to shape up. Since government is the sole provider of law and order, it is the only party "failing" in this case. Market "failure" otherwise tends to be the market not living up to some utopian's preferences.

-Jon

Re: Market Failures, Economic Models and Parento efficiency theory

Andrew Cain — Fri, 10 Oct 2008 20:00:03 GMT

In what sense, can you go into more depth?

Re: Market Failures, Economic Models and Parento efficiency theory

Jon Irenicus — Fri, 10 Oct 2008 17:40:15 GMT

Seems fine to me. Market failures, FYI, are typically failures to enforce property rights, and thus are, in point of fact, government failures.

-Jon

Market Failures, Economic Models and Parento efficiency theory

Andrew Cain — Fri, 10 Oct 2008 10:51:02 GMT

While in an Obama facebook group, I naturally came across someone who scorned me for expressing my economic principles and was demanded to answer which economic model I was a proponent for. Naturally stating that I was a proponent for no model due to the fact that in no way can an exact model be accurately propose in the economic without a controlled state or infinite variables due to the dynamics of economic productivity. My opposition claimed I was a high school (oddly enough I'm going onto graduate work in less then a year) and while I am not an economics major I am a scholar of the social sciences specifically history which enables some degree of critical thinking in the social realm. I digress. Our discussion quickly went onto market failures in which externalies were brought up and I declared that for such things to transpire a market would have to be purposely stagnant and for there to be no incentive for coporations to go environmental in order to reduce waste and ineffiency (obviously both these events could never rationally transpire) Next came the Parento efficiency, which is a favorite of mine because it predisposes that someone has to lose during an economic transaction, I utilized the "Newspaper on the side of the street, who wins" situation in which I got no applicable answer to and naturally the conversation went into this:

"Tell me why did the markets crash despite minimal govt. interference and needed state intervention to stop it from going kaput ?"

Actually government intervention didn't bring us out of the depression, it was an increase the demand of goods in the European arena. The Credit market was purposely inflated by an increase in the amount of money generated in the US economy. Now with this increase of money, came the lowering of interest rates in which investors started investing in higher-order capital goods which are more susceptible to misinvestments errors. When this increase of wasteful investments during the boom of a decade corrected itself in 1929, the higher-order capital goods experienced rapid liquidation to get rid of waste thus destroying any long term investments inside the economy. A depression decreases worker wages, price on capital goods and waste projects. It is the correction of a boom. Herbert Hoover did the exact opposite of what the Depression is suppose to do. He increased worker wages and public works projects in order to continue status quo of the 1920's. Before Herbert Hoover, no president did what he did. They allowed either wages to fall, reduced spending and taxes or conducted all three. When Hoover activitely worked against depression using government intervention, he destroyed the whole economic correction of the the economy.

Now, can anyone tell me where my thought process is perhaps hypocritical or inconsistent?

Much apperciated.