The most common justification given for government intervention in private economic interchanges is the accusation of "market failure." Advocates posit that free markets sometimes produce outcomes that are undesirable or that underserve some members of a society, so it's OK for government to infringe on people's rights in order to make up for those failures.
Not only OK, but morally proper. Failure, when it can be remedied, should be, no?
Here's where the sneakiness of linguistic legerdemain comes into play. So sneaky that many free market advocates fall for it.
Myself included, at times.
To what do I refer? Labeling a less-than-perfect outcome as failure.
Is less-than-perfection really failure?
Name me a sport where the only way to achieve success is through perfection.
Name me a business where one less-than-perfect decision or day or deal means you've failed.
Holding free markets to a perfection standard falls squarely into the category of "nirvana fallacy," and when we recognize that, we can begin to understand that we are being duped into tolerating violations of our liberties and our property rights in order to serve someone else's agenda.
But... wait! It's even worse. I quote Argentina's brilliant President Javier Milei, the architect of a stunning economic turnaround for that nation.
When exchanges are voluntary, there can be no failure. The state's only roles in voluntary exchanges are protection of property rights and enforcement of contracts.
What the interventionists call "failure" is merely imperfection, and as I already noted, perfection is an impossibility. In judging free markets against other systems, we should compare them to each other, not to some mythical and impossible standard of perfection.
Such comparisons tell the same tale every time: free markets vastly outperform managed economies, and they have done far more to elevate people's living standards than any other system yet devised.
That word "failure" deflects from that conclusion. I'd suggest that this deflection is deliberate, but most people who cite "market failure" simply haven't thought it all through, and are swayed by compassion rather than informed by reality.
Or so they like to think. That’s another sneaky bit of linguistic legerdemain. Such "compassion" is something else.
There are two types of interventionists.
There are the do-gooders, who don't think through the consequences or ponder the costs or contemplate the bad incentives or assess the broad harm. They base their support for government action in self-serving emotion:
There are the cynical self-servers, who prey on the emotions of the do-gooders to advance their agendas, to enrich themselves and those they favor, and to accrue power and control of Other People's Money.
Milei has the right of it. Any time you hear someone say "market failure," you should respond "there's no such thing." Imperfection is not failure, and any expressed wish to use government to intervene should immediately be answered as Thomas Sowell suggests:
Free markets work better than anything else. Until someone concocts a system that works better than free markets, we should reject any attempts at making things less free.
Nothing in this world is perfect. As a former colleague would say years ago, there’s something wrong with everything (Milt Goodwin, 1985). The left is quick to point out the market’s imperfections as proof of its total failure. But their remedies are at least as imperfect, usually far more so, but those imperfections are never mentioned.
We're told that slippery slope arguments are inherently invalid. And yet, here we are, far down the slope.