Mon Oct 29th, 2007 at 04:53:53 PM EST
Well, not really, but someone's written an actual semi-mainstream media article on something that I've wanted to diary about, but never quite worked out how to express: Why the market solution has all the same outcome flaws as the government solution so derided by "public choice theorists."
Article in Slate here.
You should go read the whole article, but here's a "key excerpt":
This brings us back to Nike's new shoe. Foot Locker is full of options that fit me and most other Americans. But American Indians make up just 1.5 percent of the U.S. population, and with feet on average three sizes wider, they need different-sized shoes. If we had all voted in a national election on whether the Ministry of Shoes should make wide or typical-width shoes, we surely would have chosen the latter. That's why Friedman condemned government allocation. And yet the market made the same choice. If Nike's announcement looks like a solution to this problem of ignored minority preference, it really isn't. The company took too many years to bring the shoe on line, and according to the Associated Press, the new sneaker "represents less of a financial opportunity than a goodwill and branding effort."
The tyranny of the market arises elsewhere. With drug development costs near $1 billion, if you are going to be sick, hope that your disease is common enough to attract the interest of drug makers. If you want to fly from your town to Chicago, hope that your city is big enough to fill a plane every day.
When you're not so lucky, you benefit when the government steps in on your behalf, with subsidies for research on drugs for rare diseases or for air service to small locales. For a generation, influential economists have argued for letting the market decide a wide array of questions, to protect your freedom to choose whatever you want. This is true--if everyone agrees with you.
Joel Waldfogel is the Ehrenkranz Family Professor of business and public policy at the Wharton School of the University of Pennsylvania. His new book is The Tyranny of the Market: Why You Can't Always Get What You Want.