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MARKET FAILURE AS A BASIS FOR PUBLIC GOODS THEORY (Zawodnosc rynku jako fundament teorii dobr publicznych)

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Fijor J. M.

Optimum. Studia Ekonomiczne

2012

issue 1(55)

41-53

In times of economic downturn, such as the current one, which started in year 2000, many economists, businessmen and financial experts seek answers to some difficult questions: Who is to blame for the collapse? Why, all of a sudden, did national and even global economies start to slow down? The bigger the depression, the simpler the answer. For many experts, the cause of crisis is evident: the free market, that inhuman, soulless structure, is often believed to be the root of all economic evils. Its invisible hand is responsible for injustice, poverty, unemployment, bankruptcies, high prices, hard work and other sufferings. Moreover, the free market stimulates greed, envy, and other deficiencies of humankind. Why is it so? Because the market is inefficient and ineffective; because the market is wrong. How can we counteract these deficiencies? The best way, say economists, is to limit market freedom. How? Simply by regulating and controlling it, or even by introducing a planned, collective economy. Who is to do it? Government, state, politicians. However, those who try to manage economies and markets by substituting the invisible hand with political power ignore the simple fact that politicians are not only inefficient, imperfect and misguided, but also that, in pursuit of their own self-interests, they tend to ignore the welfare of millions of ordinary market participants. As a result, the cure, which leads to overregulation of the market, becomes more harmful than the disease itself.

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1 Optimum. Studia Ekonomiczne

1 2012

1 Fijor J. M.

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MARKET FAILURE AS A BASIS FOR PUBLIC GOODS THEORY (Zawodnosc rynku jako fundament teorii dobr publicznych)