PHIL 320A Lecture Notes - Lecture 50: Neoclassical Economics, Perfect Competition, Government Failure

• School: University of Arizona
• Department: Philosophy Main
• Course: PHIL 320A
• Professor: All

Document Summary

Public choice theory challenges this claim - thesis is: if you compare imperfect market to imperfect governments, imperfect markets turn out to be the better option. Buchanan claims we need a consistent way of analyzing people"s action in the market by viewing economic and political systems both as areas where people act out of self-interest. Equivalent of market failures to government failures. 1. externalities pct would challenge the idea that government intervention would avoid externalities; interest groups facing collective good problem. Farming lobby in uk negative externalities government failure created by structure incentives within political process. Voters are rationally ignorant; government introduces failures into markets made more imperfect by political conclusion. Conclusion be skeptical of notion in that imperfect markets requires government regulation. Marker scenarios has effects more directly on people rather than in political system. People claim the government should control/police large corporations. But government regulation actually helps large corporations for two reasons.