Really good essay. I'm tired of statists assuming that markets are flawed but government interventions work as planned. As you point out, it's even worse than poor correction of market "failures"; governments frequently increase externalities. I'm current at a conference on beneficial artificial intelligence and seeing the same shortsighted thinking when it comes to AI regulation. Fortunately, there are a fair enough of us who point out the problems with these bureaucratic approaches.
It's true that governments don't always solve market failures. The market doesn't always solve market failures either. But then who should? Couldn't we argue that even if governments don't always solve market failures, they are still the best positioned authority to do so? (And sometimes do, as in the case of The Clean Air Act!)
I took Melei's comments literally, i.e. don't "endorse" the idea of market failure, but no more no less. He didn't say "don't acknowledge" (I assume from the translation). I initially thought he meant to treat it as a necessary evil.
Also, I highly recommend you do a little digging into what these orgs classify as "fossil fuel subsidies". Just off the top they obviously don't include the special taxes and regs energy companies must comply with, but 'use of depreciation on taxes' is included in the list of subsidies.
This long-winded libertarian rant against the very idea of market failure is just more tedious ideological posturing detached from reality. As Habermas would point out, it stems from a distorted communication environment where the legitimating "liberal" myths of pure market efficiency have become reified and shielded from critique.
Piketty and others are attempting to inject some reason into this systematically skewed discourse by empirically demonstrating how unrestrained market forces inevitably lead to socially destructive concentrations of power and wealth (hello, climate crisis!). But instead of engaging substantively, this diatribe just regurgitates the tired old scripts about gov't failure as if that's some checkmate argument.
Hello? Recognizing the reality of market failures doesn't negate gov't failures too. The whole point is we need pragmatic, balanced policies that harness markets while mitigating their pernicious externalities through democratic governance. This bad-faith framing of an all-or-nothing choice is just Bourdieu's theory of symbolic violence in action - using supposedly "objective" economic theory to legitimize the perpetuation of capitalist class interests.
As Jeffrey Friedman details, this libertarian ideology exists primarily as a blank slate for the wealthy to project their own interests, not a coherent ethical framework. It fundamentally cannot grapple with the reality of market failures precisely because those serve the interests of entrenched capital holders.
So please, spare us the disingenuous hand-wringing about gov't imperfections and join us in the actual work of building inclusive, accountable institutions that can intelligently counter-balance market pathologies when needed. Or just admit you're simply shilling for billionaire self-interest - at least that's an honest ideological stance.
Something something Coasian considerations enable decentralized coordination that raises fascinating questions about free/regulated being the most relevant axis of market character, yes, cool.
I got very distracted by the "accomplished academic economist" citation leading to a claim that "he had written more than 50 academic papers" that seems to dead end onto a promotional biographical blurb. His ResearchGate (https://www.researchgate.net/scientific-contributions/Javier-Gerardo-Milei-81529857) seems to turn up maybe 5ish distinct papers about monetary policy. Is his academic CV accessible anywhere?
No. It s not the coal company that fails to account for the harm from combusting carbon atoms in deciding to mine or not mine the marginal Kg of coal. It is the person who decides to combust it. Now as an administrative convenience it is easier to impose the Pigovian excise tax on the relative few sellers of the coal rather than on the thousand of combustors (with the inefficiency of needlessly discouraging those who wanted to use the coal as an anti-stocking stuffer). Nor should the state of WV impose the tax because the marginal KG of coal will then be mined in Montana or Colombia or Australian.
Nor should WV tax the coal min for the health damage that the air pollution that burning coal produces. Rather the jurisdiction in whihc the harm of the pollution is felt. This MIGHT be WV, but more likely not and indeed the burning of the coal might not occur in the jurisdiction where the harm is felt; that's the reason we have a national Clean Air Act.
Of course the Pigouvian taxation may not be optimal; in the US it is zero, but that does not mean that "the automatic connection between identifying a market failure and justifying government intervention in response is worth arguing against." Ecah market failure in each political setting is its own case. Offhand I can think of no case in which a market failure has "automatically" led to a Pigou tax.
“Governments don’t automatically care about market failure!” I cry out against the people who are pushing for the government to tackle known market failures
"governments are not social welfare maximizers. They are.. large collections of personal welfare maximizers who are loosely aligned and constrained by lots of internal and external forces”.
Confucius' governance design minimizes personal welfare and maximizes social welfare. It works better today than ever in China's history.
Really good essay. I'm tired of statists assuming that markets are flawed but government interventions work as planned. As you point out, it's even worse than poor correction of market "failures"; governments frequently increase externalities. I'm current at a conference on beneficial artificial intelligence and seeing the same shortsighted thinking when it comes to AI regulation. Fortunately, there are a fair enough of us who point out the problems with these bureaucratic approaches.
It's true that governments don't always solve market failures. The market doesn't always solve market failures either. But then who should? Couldn't we argue that even if governments don't always solve market failures, they are still the best positioned authority to do so? (And sometimes do, as in the case of The Clean Air Act!)
I took Melei's comments literally, i.e. don't "endorse" the idea of market failure, but no more no less. He didn't say "don't acknowledge" (I assume from the translation). I initially thought he meant to treat it as a necessary evil.
Also, I highly recommend you do a little digging into what these orgs classify as "fossil fuel subsidies". Just off the top they obviously don't include the special taxes and regs energy companies must comply with, but 'use of depreciation on taxes' is included in the list of subsidies.
Yet another case where I wish I remembered which one is the motte and which is the bailey in order to understand a Max argument *sigh*
I would have "liked" it twice if possible.
This long-winded libertarian rant against the very idea of market failure is just more tedious ideological posturing detached from reality. As Habermas would point out, it stems from a distorted communication environment where the legitimating "liberal" myths of pure market efficiency have become reified and shielded from critique.
Piketty and others are attempting to inject some reason into this systematically skewed discourse by empirically demonstrating how unrestrained market forces inevitably lead to socially destructive concentrations of power and wealth (hello, climate crisis!). But instead of engaging substantively, this diatribe just regurgitates the tired old scripts about gov't failure as if that's some checkmate argument.
Hello? Recognizing the reality of market failures doesn't negate gov't failures too. The whole point is we need pragmatic, balanced policies that harness markets while mitigating their pernicious externalities through democratic governance. This bad-faith framing of an all-or-nothing choice is just Bourdieu's theory of symbolic violence in action - using supposedly "objective" economic theory to legitimize the perpetuation of capitalist class interests.
As Jeffrey Friedman details, this libertarian ideology exists primarily as a blank slate for the wealthy to project their own interests, not a coherent ethical framework. It fundamentally cannot grapple with the reality of market failures precisely because those serve the interests of entrenched capital holders.
So please, spare us the disingenuous hand-wringing about gov't imperfections and join us in the actual work of building inclusive, accountable institutions that can intelligently counter-balance market pathologies when needed. Or just admit you're simply shilling for billionaire self-interest - at least that's an honest ideological stance.
Something something Coasian considerations enable decentralized coordination that raises fascinating questions about free/regulated being the most relevant axis of market character, yes, cool.
I got very distracted by the "accomplished academic economist" citation leading to a claim that "he had written more than 50 academic papers" that seems to dead end onto a promotional biographical blurb. His ResearchGate (https://www.researchgate.net/scientific-contributions/Javier-Gerardo-Milei-81529857) seems to turn up maybe 5ish distinct papers about monetary policy. Is his academic CV accessible anywhere?
No. It s not the coal company that fails to account for the harm from combusting carbon atoms in deciding to mine or not mine the marginal Kg of coal. It is the person who decides to combust it. Now as an administrative convenience it is easier to impose the Pigovian excise tax on the relative few sellers of the coal rather than on the thousand of combustors (with the inefficiency of needlessly discouraging those who wanted to use the coal as an anti-stocking stuffer). Nor should the state of WV impose the tax because the marginal KG of coal will then be mined in Montana or Colombia or Australian.
See, mutatis mutandis, [https://thomaslhutcheson.substack.com/p/why-not-lng-exports]
Nor should WV tax the coal min for the health damage that the air pollution that burning coal produces. Rather the jurisdiction in whihc the harm of the pollution is felt. This MIGHT be WV, but more likely not and indeed the burning of the coal might not occur in the jurisdiction where the harm is felt; that's the reason we have a national Clean Air Act.
Of course the Pigouvian taxation may not be optimal; in the US it is zero, but that does not mean that "the automatic connection between identifying a market failure and justifying government intervention in response is worth arguing against." Ecah market failure in each political setting is its own case. Offhand I can think of no case in which a market failure has "automatically" led to a Pigou tax.
“Governments don’t automatically care about market failure!” I cry out against the people who are pushing for the government to tackle known market failures
"governments are not social welfare maximizers. They are.. large collections of personal welfare maximizers who are loosely aligned and constrained by lots of internal and external forces”.
Confucius' governance design minimizes personal welfare and maximizes social welfare. It works better today than ever in China's history.