We are a commune of inquiring, skeptical, politically centrist, capitalist, anglophile, traditionalist New England Yankee humans, humanoids, and animals with many interests beyond and above politics. Each of us has had a high-school education (or GED), but all had ADD so didn't pay attention very well, especially the dogs. Each one of us does "try my best to be just like I am," and none of us enjoys working for others, including for Maggie, from whom we receive neither a nickel nor a dime. Freedom from nags, cranks, government, do-gooders, control-freaks and idiots is all that we ask for.
To disguise the value judgments inherent in their regulatory agendas, economists and policymakers justify their proposals as hyper-rational, politically neutral responses to "market failures." To prove these proposals enhance economic efficiency and societal welfare, they produce "cost-benefit analyses." Free markets and price signals work better, they tell us, when we embrace their recommended taxes, subsidies, and mandates. Any rule that requires $1 million of equipment to reduce by 1% the risk of death for 100 people is just common sense; one requiring $1 billion of equipment to reduce by less than 1% the emission of carbon dioxide for one year is the only responsible choice.
All this may be true on classroom blackboards and in abstract computer models. But technocrats armed with sharpened pencils and boundless egos tend not to calculate reliably which market prices are "too low" or which resource re-allocations would produce benefits that exceed costs. The easy recourse to the language of market failure — the claim that somewhere some social cost is going unpaid — reflects a subjective policy preference when we do not know the cost's size or incidence, the extent to which it is unpaid, or what countervailing benefits might be lost through a correction. A cost-benefit analysis that summarizes how many "lives" a rule will "save," how many "jobs" will be "created," and how much these achievements are "worth," is little more than marketing propaganda when the terms are unhelpful abstractions and the estimates unreliable.
Many "market failures" are the result of malinvestment due to government intervention. There are very few true 'market failures', but some do exist. Usually the solution to a 'market failure' is just time and patience. However, increased information, and increased access to it, can help reduce true market failures. Many true market failures are usually due to some kind of failure of information dissemination, or having it deliberately withheld.
One of my favorites on economics is Arnold Kling. From one of his posts:
Chicago economics: Markets work, so use markets
Harvard-MIT economics: Markets fail, so use government
Masonomist: Markets fail, so use markets
Masonomist refers to the economists at George Mason University such as Tyler Cowen and Don Boudreaux.
This is in reference to the truth that government programs that fail never shut down or lose funding. When we have instances of "market failure" people stop buying the product or service and the failure disappears.
Most claims of market failure demonstrate only a misunderstanding of what the market's job was in the first place. Hint: the market doesn't exist to implement your personal value judgments about public policy.