Market Failures: When the Invisible Hand Gets Shaky
M. Ribaudo, F. Kuchler, L. Mancino. ERS. USDA
Miércoles 8 de septiembre de 2010, por Carlos San Juan
The enormously complicated problem of deciding where and how all of society’s resources might best be used is usually solved by individuals following their own self-interest in markets largely free of government oversight.
Markets fail when exchanges between willing buyers and sellers are impeded and efficiency is compromised.
Overcoming such market failures is a role for government, but devising a solution that improves upon the status quo may not always be possible.
Every individual… neither intends to promote the public interest, nor
knows how much he is promoting it…he intends only his own gain, and
he is in this, as in many other cases, led by an invisible hand to promote
an end which was no part of his intention.
Adam Smith, The Wealth of Nations, 1776