Market Failures, Taxes, and Subsidies: Crash Course Economics #21
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Date: 2022-04-04
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Comments and reviews: 7
Calvin
The argument pre assumes that people know what is best for society, rather than view the free market as a tool for discovering utility. The contradictions the conclusion in the price signaling video.
I'm not arguing against Government programs, I'm arguing against the mindset this video ends on. That the free market generates efficiency, but that government generates positive outcomes.
Governments are inherently inefficient. Government welfare programs use 70% of funding on employees, while not for profits use 25%, and they also lack a profit motive. There's something fundamentally inefficient about government.
Taxes are also a negative externality. Ignoring this creates a overly rosy picture of Government, which when taken to the extreme views the free market only as a necessary evil.
Another extreme view is the assumption that free mark externalities are always preferable to government externalities. This conclusion leads you to the conclusion we should have no Government at all.
Public choice economics is a sub discipline used to explain the behavior of Government employees and study political entrepreneurship. It wasn't mentioned once.
The conclusion I would teach others, isn't that they need to be a libertarian like me, and believe that government is inherently cohesive. But that they need to approach economics with a dispassionate curiosity, and when deciding on public policy weigh the positive externalities and negative externalities of all considered proposals, and remember that new data can alter the cost benefit analysis. Many people see one data set one time and conclude that its immutable or definitive.
For example, new data is showing us that a sufficiently high minimum wage dose create externalities. Like youth unemployment, less hours, unpaid learning opportunities, and in extream case increases in the cost of goods and services.
-There's a smoke stack on the back of every government program. - -MF.
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The argument pre assumes that people know what is best for society, rather than view the free market as a tool for discovering utility. The contradictions the conclusion in the price signaling video.
I'm not arguing against Government programs, I'm arguing against the mindset this video ends on. That the free market generates efficiency, but that government generates positive outcomes.
Governments are inherently inefficient. Government welfare programs use 70% of funding on employees, while not for profits use 25%, and they also lack a profit motive. There's something fundamentally inefficient about government.
Taxes are also a negative externality. Ignoring this creates a overly rosy picture of Government, which when taken to the extreme views the free market only as a necessary evil.
Another extreme view is the assumption that free mark externalities are always preferable to government externalities. This conclusion leads you to the conclusion we should have no Government at all.
Public choice economics is a sub discipline used to explain the behavior of Government employees and study political entrepreneurship. It wasn't mentioned once.
The conclusion I would teach others, isn't that they need to be a libertarian like me, and believe that government is inherently cohesive. But that they need to approach economics with a dispassionate curiosity, and when deciding on public policy weigh the positive externalities and negative externalities of all considered proposals, and remember that new data can alter the cost benefit analysis. Many people see one data set one time and conclude that its immutable or definitive.
For example, new data is showing us that a sufficiently high minimum wage dose create externalities. Like youth unemployment, less hours, unpaid learning opportunities, and in extream case increases in the cost of goods and services.
-There's a smoke stack on the back of every government program. - -MF.
reply
Ewald
-The question is how we can make our lives better. -
That's the key sentence. If this really becomes our main goal, then all the social programs required to meet our essential and basic needs as a society would be funded properly and either - if the market is able to do it properly - provided by the market or - if the market fails to do its job properly - provided by the government. And we would ensure that every citizen lives a decent life.
But unfortunately this isn't how our economy seems to work actually.
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-The question is how we can make our lives better. -
That's the key sentence. If this really becomes our main goal, then all the social programs required to meet our essential and basic needs as a society would be funded properly and either - if the market is able to do it properly - provided by the market or - if the market fails to do its job properly - provided by the government. And we would ensure that every citizen lives a decent life.
But unfortunately this isn't how our economy seems to work actually.
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gNightrow
This isn't the issue of free market, this is the fault of people being reliant on a luck based system with inefficient communication rather than a merit based system with effective communication. Betting on stocks is a form of gambling not a form of voluntary exchange of goods and services.
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This isn't the issue of free market, this is the fault of people being reliant on a luck based system with inefficient communication rather than a merit based system with effective communication. Betting on stocks is a form of gambling not a form of voluntary exchange of goods and services.
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Darsh
Focusing on how the two sides can work together, rather than which of them is better. clever quote that sums up a lot of political problems nowadays. Too much all one way or the other, which stronger side-effects, rather than the superior middle option, with fewer side-effects.
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Focusing on how the two sides can work together, rather than which of them is better. clever quote that sums up a lot of political problems nowadays. Too much all one way or the other, which stronger side-effects, rather than the superior middle option, with fewer side-effects.
reply
Jill
Ugh the government is always telling us what to do, -don't drive too fast, don't build houses on Yellowstone, and DON'T KILL ANYBODY- LOL okay, I'm sure the government isn't the only ones that aren't telling us not to kill anybody
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Ugh the government is always telling us what to do, -don't drive too fast, don't build houses on Yellowstone, and DON'T KILL ANYBODY- LOL okay, I'm sure the government isn't the only ones that aren't telling us not to kill anybody
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Antonio
Whats funny to me is that the case of education being paid out of pocket as a what if scenario is the reality in my country, Chile, where everything was privatized, following Friedmans ideas, during the dictatorship
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Whats funny to me is that the case of education being paid out of pocket as a what if scenario is the reality in my country, Chile, where everything was privatized, following Friedmans ideas, during the dictatorship
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ZygiNY
Like say the public park bathroom in NYC, that Stossel did a video about, that cost $2 million. That's quite a correction of free market by politicians. What a waste of taxpayer money disaster.
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Like say the public park bathroom in NYC, that Stossel did a video about, that cost $2 million. That's quite a correction of free market by politicians. What a waste of taxpayer money disaster.
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