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To: skinowski who wrote (91858)	12/21/2008 12:01:08 PM
From: kormac	Respond to of 116555

And "market failure" is just a phrase used to shift responsibility from those who have set up an unrealistic model how people act in their economic lives. It is convenient to shift the discussion to an abstract concept and avoid talking about the weakness of the entire structure of economic theory.

To: skinowski who wrote (91858)	12/21/2008 6:09:32 PM
From: Moominoid	Read Replies (1) \| Respond to of 116555

I think it's a misunderstanding. "Invisible hand" does not "lead" - it does not exist - it is merely a metaphor for what occurs as result of economic activity, whatever it happens to be during a given period. Well that depends on what you mean by "invisible hand" - the same process - a macro outcome reflecting uncoordinated individual decisions can lead to good or bad outcomes. Excessive pollution is a negative outcome due to the market failure of public goods/external costs - i.e. polluters can impose costs on others. For the free market or "invisible hand" to result in an efficient outcome (where none can be made better off except at the expense of others) such external costs (due to the existence public goods like environmental quality) must not exist. It's one of the many neccessary conditions for the positive invisible hand outcome to occur. Let's just hope that those "regulators" know their arse from their elbow. Too often, it seems, they simply forge ahead and act on good intentions, all the way remembering to grab more power as they go. Government failure is just as important as market failure. or some reason people think that downturns are market failures. They are not - life is cyclical. Neither I nor most economists I think, think that. Persistent high unemployment though is likely to reflect even market or government failures.