Volume 1, Issue 8, 2013
Market Failure or Government Failure? A Response to Jaworski
Peter Jaworski objects to my “market failures” approach to business ethics on the grounds that in some cases I have mislabeled as “market failure” what are in fact instances of "government failure." While acknowledging that my overall approach might better be referred to as “Paretian,” I resist Jaworski's specific criticism. I argue that the term government failure should not be used to describe market transactions that are made less efficient through government intervention, but should be reserved for cases in which the market mechanism has been suspended and the transaction is occurring, inefficiently, through the organizational power of the state.