Monday, May 15, 2006


Government Failure

Although there has been much written about market failure, there has been considerable neglect in the area of government failure. Why is that? Is it simply unpopular, or is it because it can come into direct opposition with our own ideology?

Wikipedia provides a little taste of government failure.

I think this is the most important issue: What constitutes government failure?

Is it a bad law that distorts decision making, risks, and the essential allocation of time, resources, and funds?

Is it inefficient political structures like gerrymandernig, voting, lobbying, and pork barrel spending?

Or is it simply governmental involvement in the individual lives of its citizens beyond some optimal level?

Is today's welfare/warfare state a governmental failure, by its sheer size, excessive involvement, and inefficient allocation of resources?

If we are so quick to claim market failure, should not the same standard be levied against government failure? Or perhaps if market failure is rare, then governmental failure should be considered rare as well.

Want to learn more, buy Government Failure!!

It seems the reason for demonstrating a market failure is to legitamize use of government. So would demonstration of government failure have as its end the legitimization of markets? Well, of course, but that kind of puts makets on the defensive, which I would consider a disadvantageous stance. And unnecessary. I think we can demonstrate the advantages of markets by stating them positively.

On a different note, I watched "The Fifth Element" this weekend, an older but really fun movie. There is a great scene in this movie, however, which is a carbon-copy of the broken window fallacy. Anybody scene it? And, what other great free-market/libertarian (Juris naturalist) movies/scenes have you seen? Could a course be put together using such popular media to teach these ideologies?
I think current claims to legitimize governmental action on the basis of a market failure, give additional creedence to governmental involvement.

Turning that around, I think it would give additional creedence to the use of markets to solve public policy issues and social problems.

Whether it is unwarranted attention or not, I am not sure how it can be any more "disadvantageous" than the current ability to claim market failure with little or no evidence.
The difference I'm thinking of is strategic, and related to how people will respond to the message. Often we have heard that "The medium is the message," and I have to agree. Additionally, I believe a defensive stance is negatively percieved by most people, and a positive spin receives better feedback.
I need to study market failure more... lucky for me I'm in Marglois' class in the fall.
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