Economics pp 110-127 | Cite as

Market Failure Versus Government Failure

  • Chris Mulhearn
  • Howard R. Vane
Part of the Macmillan Foundations book series (PAFS)


Chapters 1–4 of this book elaborated the perspective that the free and competitive market is an effective means of resolving the basic economic questions surrounding the use and allocation of scarce resources. However, in Chapter 5 we saw that once the implicit assumption that free markets are necessarily competitive is relaxed, established certainties as to the inherent strengths of laissez-faire begin to melt away. In real markets, the existence of monopoly and oligopoly directly undermines consumer sovereignty, and may be inimical to general consumer interests.


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Further reading

  1. Alt, J. E and K. A. Chrystal Political Economics (Brighton: Wheatsheaf Books, 1983). Provides an excellent overview of the debate in economics over the role of the state.Google Scholar
  2. Waller, P. J. Democracy and Sectarianism: A Political and Social History of Liverpool 1868–1939 (Liverpool: Liverpool University Press, 1981). The source for the material in this chapter on the history of public housing in Liverpool.Google Scholar
  3. Friedman, M. Capitalism and Freedom (Chicago: University of Chicago Press, 1962). Pro-vides a brief and very readable exposition of the liberal view of market failure and market competence.Google Scholar
  4. Hayek, F. A. The Road to Serfdom (London: Routledge, 1944). Slightly more difficult but per-haps the most eloquently written liberal polemic.Google Scholar
  5. Jackson, P. M. and C. M. Price (eds.) Privatization and Regulation (Harlow: Longman, 1994). Offers a useful overview of privatization issues in the UK and the wider international context.Google Scholar
  6. Foot, M. Aneurin Bevan 1945–1960 (London: Paladin, 1975). The standard biography of Aneurin Bevan.Google Scholar

Copyright information

© Chris Mulhearn and Howard R. Vane 1999

Authors and Affiliations

  • Chris Mulhearn
  • Howard R. Vane

There are no affiliations available

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