The fiction of market failures

Just a short article to get the site running again. Economic textbooks generally are rife with the concept of "market failures". The most important are externalities (positive and negative), public goods and monopolies. With an externality the market fails because the price does not into account all costs (for example pollution) or all benefits (for example education). Public goods present a market failure because they are underproduced in a market (for instance art) or not produced at all (like roads). Monopolies are a market failure because markets are supposed to be full of numerous suppliers and demanders. In this lecture from Austrian economist and libertarian Walter Block those and other market failures (such as income inequality) are dismissed as "nonsense on stilts"). To prove the market failures many economists indeed use nonsensical concepts like ordinal utility and perfect competition (which doesn't exist, never did, and never will). However, on this concept of perfect competition anti-trust policy is based. When you charge too high a price, you are accused of monopoly, when you charge too low a price you stand trial for predatory pricing and unfair competition, when you charge the same price as anyone else they accuse you of collusion. 

Anyway, let's turn the mike over to Walter Block: