The Public Interest

A theory of non-market failures

Charles Wolf, Jr.

Spring 1979

ARGUMENTS between defenders of the market and advocates of government intervention to correct the market’s shortcomings are characterized by a curious asymmetry.  The asymmetry is neither in intensity of feelings and preferences-they are usually equally strong on both sides-nor in the intellectual appeal of each side’s account of its idealized model-“perfectly” competitive markets on the one hand, and perfectly functioning governments on the other. The asymmetry lies instead in the existence of a ready-made, well-articulated theory of the market’s shortcomings, and the lack of a comparable theory to explain the shortcomings of non-market systems.

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