Name Any Market You Don't Want to Regulate
A challenge for mainstream economists
Back in the 90s, I was arguing over email with a famous leftist economist. Strangely, he wasn’t trying to convince me to soften my criticism of government regulation and government spending. Instead, he was trying to convince me that — appearances notwithstanding — he wasn’t nearly as anti-market as I imagined. Quoting from memory, he told me: “Even economists like me and Joe Stiglitz start with the presumption that a totally free market is optimal.”
I wanted to believe him, but his reassurances didn’t ring true. My response: “If you and Stiglitz actually start with a presumption that a totally free market is optimal, I challenge you to name any market you don’t want to regulate.” Yes, every presumption is defeasible. But if your so-called “presumption” gets defeased 100% of the time, you’re just abusing language.
Which brings me to my challenge for mainstream economists: Name any market you don’t want to regulate. Not a hypothetical market on a homework problem. An actual market for an actual product in the real world. Explanations of your reasoning in light of the theory of market failure (and possibly public choice/political economy) are a definite plus, but even a one word answer would be welcome.
Comments are open.
Post 1960's the only non-regulated market in the US was/is software. As-is and no warranty or fit-for-purpose is the standard software license and it held up in the courts and public opinion till the present day. Have broken parts in programs was just accepted. Progress in the physical world withered as people that liked to do things were drawn to computers because you could just do things and even sell them to others with no liability. Buyer beware but lots of options. It would be great (maybe?) if real objects could have similar treatment again.
While I'm not an economist (nor a leftist), I don't fully understand the relevance of the challenge to your interlocutor's point, as it focuses on the question "which markets should be regulated [at all]?" rather than the question "how much should we regulate each market?" I would expect your typical mainstream economist to reply that there are some markets for which they wish *very little* regulation, and this seems sufficient to defend his point.