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View Full Version : Economics is Fun, Part 16: Market Failure



Chris
03-21-2012, 12:52 PM
http://www.youtube.com/watch?v=VWju28JneDI&feature=related

He touches on Schumpeter's concept of creative-destruction.

And he raises the similarity with government failure. I think we're in the midst of a government bubble. Greece's defaulting but a pin prick.



Previous Economics is Fun topics...

Part 1: Value (http://thepoliticalforums.com/threads/1879-Economics-is-Fun-Part-1-Value)
Part 2: Price (http://thepoliticalforums.com/threads/1892-Economics-is-Fun-Part-2-Price)
Part 3: Specialization (http://thepoliticalforums.com/threads/1908-Economics-is-Fun-Part-3-Specialization)
Part 4: Trade (http://thepoliticalforums.com/threads/1922-Economics-is-fun-part-4-Trade)
Part 5: Time (http://thepoliticalforums.com/threads/1948-Economics-is-Fun-Part-5-Time)
Part 6: Money (http://thepoliticalforums.com/threads/1982-Economics-is-Fun-Part-6-Money)
Part 7: Middlemen (http://thepoliticalforums.com/threads/2021-Economics-is-Fun-Part-7-Middlemen)
Part 8: Speculators (http://thepoliticalforums.com/threads/2077-Economics-is-Fun-Part-8-Speculators)
Part 9: Joint Enterprise (http://thepoliticalforums.com/threads/2112-Economics-is-Fun-Part-9-Joint-Enterprise)
Part 10: Taxation (http://thepoliticalforums.com/threads/2207-Economics-is-Fun-Part-10-Taxation)
Part 11: Competition (http://thepoliticalforums.com/threads/2238-Economics-is-Fun-Part-11-Competition)
Part 12: Banking (http://thepoliticalforums.com/threads/2281-Economics-is-Fun-Part-12-Banking)
Part 13: International Trade (http://thepoliticalforums.com/threads/2334-Economics-is-Fun-Part-13-International-Trade)
Part 14: Opportunity (http://thepoliticalforums.com/threads/2378-Economics-is-Fun-Part-14-Opportunity)
Part 14: Growth (http://thepoliticalforums.com/threads/2424-Economics-is-Fun-Part-15-Growth)

Peter1469
03-21-2012, 05:39 PM
Beating the donkey with a stick works to some extent, but the donkey doesn't like it! Great line. :smiley:

Greece's default was a pin prick; next up Spain. Their PM came out recently and told the EU that they had no intention of meeting their assigned deficit reduction this year.

Conley
03-21-2012, 05:51 PM
Beating the donkey with a stick works to some extent, but the donkey doesn't like it!

:laugh: Hilarious...there's some country, it might be England where they use donkey, as an insult. It works on a couple of levels.

Conley
03-21-2012, 05:53 PM
Interesting video...the dangers of market failure, such as they are, certainly seem far preferable to the 'too big to fail' system we have set up now.

Chris
03-22-2012, 10:25 PM
George Will on The inexorable march of creative destruction (http://www.washingtonpost.com/opinions/from-sears-to-britannica-creative-destruction-rewards-change/2012/03/20/gIQAgsvXSS_story.html).

Great conclusion: "As long as America is itself, it will welcome the messy chaos that is not really disorder but, rather, what Postrel calls “an order that is unpredictable, spontaneous, and ever shifting, a pattern created by millions of uncoordinated, independent decisions.” Professional coordinators, a.k.a. bureaucracies, are dismayed. Good."

Peter1469
03-22-2012, 10:38 PM
A lot of the problem with "creative destruction" is that large corporations don't operate according to free market principles yet we are surprised that they fail or create market distortions.

Chris
03-23-2012, 07:26 AM
Not a problem with creative destruction, a problem with government focusing corporations on reporting profits in the short term.

Conley
03-24-2012, 10:05 AM
George Will on The inexorable march of creative destruction (http://www.washingtonpost.com/opinions/from-sears-to-britannica-creative-destruction-rewards-change/2012/03/20/gIQAgsvXSS_story.html).

Great conclusion: "As long as America is itself, it will welcome the messy chaos that is not really disorder but, rather, what Postrel calls “an order that is unpredictable, spontaneous, and ever shifting, a pattern created by millions of uncoordinated, independent decisions.” Professional coordinators, a.k.a. bureaucracies, are dismayed. Good."

Great article and fascinating history.