Nick Arnett <[EMAIL PROTECTED]>
> *The" way? Or *a* way?
A way. The best way I've seen. But if you know of a better way,
I'd certainly be interested.
> Surely it is generally accepted that the free market fails sometimes.
Surely. How could an emergent system be perfect?
> Otherwise we wouldn't have anti-trust laws.
That is debatable. Many economists contend that many anti-trust laws
are mistaken. But I don't mean to dispute that there are market failures.
I think the best examples of market failures are those where the costs
of pursuing a project do not all accrue to those who are pursuing the
project, as I've mentioned before.
> It fails when competition is
> inherently inefficient, such as in portions of public utility systems.
I think you are referring to what economists call a "natural monopoly",
such as the situation for a water company (where it is extremely inefficient
to have more than one set of water pipes serving a community). I agree
that this is an example where free-market competition is unlikely to result
in a more efficient solution.
> It seems to fail when goods and services exhibit "network effects" that yield
> increasing returns (which anti-trust laws have been used to mitigate).
That is less clear to me. Where one set of network effects can occur, there
may be others that can occur.
> There is no objective measure for appropriate distribution of
> resources, so it is a fallacy to argue that free markets distribute
> resources appropriately.
If you know such an argument is fallacious, why would you make it or
think someone else is making it?
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