Alternatives To Markets
It is easy to forget that the vast majority of economic activity occurs outside of markets, and is outside of markets for good reasons. Environmental services, household production (including raising children), production of public goods and central planning of production within corporations all lie outside of markets. There are also important non-market mechanisms such as Matching Theory.
- Basic Income (16 links)
- A simple social welfare program that ensures everyone has sufficient income to raise them above the poverty line, whether or not they work. Most libertarians oppose this as "redistribution". Milton Friedman proposed this as a negative income tax. In Canada, an experimental version was called Mincome. In the US, the Alaska Permanent Fund is a basic income system.
- Central Planning (6 links)
- Central planning is responsible for the largest fortune in the world: Walmart. It is behind the most economical medical care in the first world: everywhere but the US. Economics and history show that where the market fails badly, central planning is often a much better solution.
- Children (12 links)
- Much libertarian theory ignores the fact that we start out as children. Many libertarians feel that government has no role in protecting or supporting children. Child rearing is largely not a market activity.
- Environment (20 links)
- Libertarians have no way of constraining damage to the environment or maintaining a healthy environment to live in. It is an issue they prefer to pretend does not exist, which is why global warming denialism is so popular among libertarians. Ecosystem services are estimated at over $125 trillion per year, yet libertarians and others usually ignore externalities (such as pollution, habitat destruction, and global warming) that reduce these services dramatically.
- Matching Theory (3 links)
- (Also known as Stable Allocations.) Lloyd Shapley and Alvin Roth won the Nobel prize in economics for this theory. Noah Smith says "Matching Theory is basically an algorithm - a mathematical technology - for finding optimal matches between pairs or groups of people. It incorporates human preferences, optimization, and strategic behavior, so it is economics." It is also a good example of Central Planning that can work better than actual markets.
- Public Goods And Club Goods (15 links)
- Libertarians often refuse to recognize public goods and club goods, or that governments have a role in their provision. The list of important goods with substantial public or club goods components is very long, and includes education, law, safety, health, transportation, research and much more. (Club goods are like public goods but excludable and only rivalrous with congestion.)
- Rationing (1 link)
- Rationing is a non-market solution for shortages which emphasizes fairness, as opposed to Price Gouging which burdens the poor. In wars and disasters, temporary rationing is an important tool.
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