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>We know for a fact that free markets do not provide an answer for externalities like pollution and climate change and the only reason to say this is to buy pol
by ausbah 7y ago
>We know for a fact that free markets do not provide an answer for externalities like pollution and climate change and the only reason to say this is to buy political cover for the real motivation.
Would it be fair to say that free markets answer externalities, but only when they become so severe that the market producing the externatlities itself becomes degraded? Not really an exception to your statement, more of a ludicrous technicality.
- slg 7y agoIf Big Oil/Coal pushes us to the point that climate change is on the verge of causing the collapse of civilization as we know it, I am sure they will react in some way. So your point is probably both ludicrous and fair. Although that just leads to a semantic debate because the externality would then be internalized since the people in the market would be directly impacted to the same degree that people outside the market would be. Either way, it is idiotic to wait around twiddling our thumps long enough to find out.
- rayiner 7y agoNo. The idea of the market is that local, free transactions will produce a globally optimal outcome. But even within idealized models, free transactions only lead to optimal outcomes where the cost of externalities is charged to the activities that produce them. Otherwise, the economy will produce more of the activity than the efficient level.