Market power and externalities are examples of a general phenomenon called market failure-the inability of some unregulated markets to allocate resources efficiently. When markets fail, public policy can potentially remedy the problem and increase economic efficiency. Microeconomists devote much effort to studying when market failure is likely and what sorts of policies are best at correcting market failures. As you continue your study of economics, you will see that the tools of welfare economics developed here are readily adapted to that endeavor. Despite the possibility of market failure, the invisible hand of the marketplace is extraordinarily important.
Greg MankiwRelated topics
best continue correcting despite devote economics efficiency effort endeavor fail failure general hand inability increase invisible likely market phenomenon policy possibility power problem public remedy see study studying welfare marketplaceRelated quotes
In proactive problem solving we specify where we want to go, and we try to get there. Although such an approach does not eliminate the possibility of overlooking relevant consequences of our solutions, it reduces the probability of doing so. The more ultimate the desired outcome we specify, the more likely we are to consider the intermediate and long-run consequences of our immediate actions. The more immediate the source of dissatisfaction we try to get rid of, the less likely we are to take account of relevant consequences. Therefore, the chances of overlooking relevant consequences are minimized when we formulate a problem in terms of approaching one or more ideals.
Russell L. Ackoff
The central psychological endeavor of Kierkegaard may be summed up under the heading of the question he pursued relentlessly: How can one become an individual? The individual was being swallowed up on the rational side by Hegel's vast logical "absolute Whole," on the economic side by the increasing objectification of the person, and on the moral and spiritual side by the soft and vapid religion of his day. Europe was ill, and was to become more so, not because knowledge or techniques were lacking but because of the want of passion, commitment. ""Away from Speculation, away from the System," he called, and "back to reality!"
Rollo May
At the present stage, the historic function of the Soviet Armed Forces is not restricted merely to their function in defending our motherland and the other socialist countries. In its foreign policy activity the Soviet state actively and purposefully opposes the export of counter-revolution and the policy of oppression, supports the national liberation struggle, and resolutely resists imperialist aggression in whatever distant region of our planet it may appear. The party and Soviet Government rely on the country's economic and defense might in fulfilling these tasks...The development of the external functions of the socialist armies is a natural process. It will continue.
Andrei Grechko
From the day the President announced my nomination as the Attorney General of the United States three months ago, I have thought often about how to best prepare to meet the awesome responsibilities of this office. Outside these walls, the cries of those powerless souls who are injured, disenfranchised or otherwise aggrieved may indeed be faint. But those same pleas for help echo powerfully within the Department of Justice. Every day, like a steady drumbeat we are asked to provide an answer to a problem, to secure a remedy, to be a champion - and every day this Department responds as it has done so time and time again throughout the history of our beloved America.
Alberto Gonzales
With the collapse of the old welfare states, all this has come to seem decidedly quaint. As the language of antibureaucratic individualism has been adopted, with increasing ferocity, by the Right, which insists on "market solutions” to every social problem, the mainstream Left has increasingly reduced itself to fighting a kind of pathetic rearguard action, trying to salvage remnants of the old welfare state: it has acquiesced with–often spearheaded–attempts to make government efforts more "efficient” though the partial privatization of services and the incorporation of ever-more "market principle,” "market incentives,” and market-based "accountability processes” into the structure of the bureaucracy itself.
David Graeber
