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Aug 22, 2011 22:09

Real-world markets quickly cease to function unless the government regulates market failures and externalities. One of the market failures the government is responsible for regulating is the exploitation of weaknesses in consumer knowledge. Note that this does not mean the government is responsible for educating consumers!

However, educating consumers is frequently the most cost-effective means of preventing market failure. When that is the case, then education is the government's obligation.
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