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Just grab a freshman level microeconomics textbook. The conditions under which a market is efficient have been well known for decades - lack of externalities,
by DebtDeflation 6y ago
Just grab a freshman level microeconomics textbook. The conditions under which a market is efficient have been well known for decades - lack of externalities, no transaction costs, symmetrical information, enough buyers and sellers that everyone is a price taker, etc. My undergrad was in Econ and it drives me nuts how frequently this debate turns into a "free markets are always best vs die capitalism!" false dichotomy.
- zozbot234 6y agoThere's a few caveats to that - namely, that many of these conditions act as a constraint on government regulation as much as they do on private contracting. And the kinds of government regulations which can help are also somewhat known - generally they boil down to "create an enforceable property right in X where none existed before" or "provide a different 'default' contract arrangement for Y, because asymmetric info/externalities/transaction costs/etc. mean that what you get absent that default is not socially beneficial". Stuff like truly extensive regulation or outright central planning is nowadays relegated to narrow settings where market entry is considered infeasible and a "natural monopoly" cannot be avoided, so there is a real need to "carve out" the portions where competition is not feasible and apply strict regulations to those. That mostly applies to public utilities and a few large businesses like airlines, etc. Internet-provided social platforms may be in the same boat.