Market Failures Quotes

Markets are smart and governments are dumb.

… markets don't look after social needs. Markets are designed to allow individuals to look after their private needs and to pursue profit. It's really a great invention and I wouldn't under-estimate the value of that, but they're not designed to take care of social needs.

Buy when there's blood in the streets, even if the blood is your own.

I do tend to think that things that have incredibly long time horizons often do involve market failures.

"Free markets" is a very general term. There are all sorts of problems that will emerge. Free markets work best when the transaction between two individuals affects only those individuals. Most often, a transaction between you and me affects a third party. That is the source of all problems for government. That is the source of all pollution problems, of the inequality problem. This reality ensures that the end of history will never come.

You know capitalism is this wonderful thing that motivates people, it causes wonderful inventions to be done. But in this area of diseases of the world at large, it's really let us down.

No matter how the financial system is set up, no matter what the economic system is, as long as you have people, you're going to have financial crises; you're going to have bubbles that manifest themselves in the financial system.

Markets don’t always self-correct fast enough. Until they do there is an immense amount of damage that has been done which is why we need government intervention.

When laissez-faire creates instability, the move to a freer market can be something less than pure gain.

I think on the efficiency level, not only the distribution level, capitalism is a flawed system. It probably has the same virtues as Churchill attributed to democracy: It's the worst system except for any other. And I think that's right, but it cannot be thought that some unmitigated belief in free markets is a cure even from the efficiency point of view.

What we need to understand is, one, that there are market failures; and two, that there are things like asset bubbles and irrational exuberance. There are periods of booms, bubbles, and manias. These things, if left to themselves, can lead to crashes, to busts, to panics.

Antitrust is the way that the government promotes markets when there are market failures. It has nothing to do with the idea of free information.

They [free market policies] were never based on solid empirical and theoretical foundations, and even as many of these policies were being pushed, academic economists were explaining the limitations of markets for instance, whenever information is imperfect, which is to say always.

The financial failure of the United States was a government failure and not a market failure.

I believe in market economics. But to paraphrase Churchill - who said this about democracy and political regimes - a market economy might be the worst economic regime available, apart from the alternatives. I believe that people react to incentives, that incentives matter, and that prices reflect the way things should be allocated. But I also believe that market economies sometimes have market failures, and when these occur, there's a role for prudential - not excessive - regulation of the financial system.

We accept, without sufficient consideration, a system that breeds inefficiencies and actually encourages the creation of shortages.

But our energy woes are in many ways the result of classic market failures that can only be addressed through collective action, and government is the vehicle for collective action in a democracy.

I think there's a lot of merit in an international economy and global markets, but they're not sufficient because markets don't look after social needs.

Until the Great Depression, most economists clung to a vision of capitalism as a perfect or nearly perfect system. That vision wasn’t sustainable in the face of mass unemployment, but as memories of the Depression faded, economists fell back in love with the old, idealized vision of an economy in which rational individuals interact in perfect markets.

Isn't it interesting that markets are not just perfect? In business school and economic theory, you learn all about those perfect markets, and there's no such thing as a perfect market.

Bubbles have quite a few things in common, but housing bubbles have a spectacular thing in common, and that is every one of them is considered unique and different.

My goal is first of all to promote a public debate about where markets serve the public good and where they don't belong. That's my first goal.

Worker ownership within a state capitalist, semi-market system is better than private ownership but it has inherent problems. Markets have well-known inherent inefficiencies. They're very destructive.

Entrepreneurs are the seekers of solutions, and that they will go into these places where both market and traditional aid has failed or traditional charity has failed.