What is a good article for “market failure” (or more accurately, the failure of the current system to distribute goods and services to the wishes of each person)?
And why does my dad use this example to show that market failure can happen (the free market kind)? Lets say China suddenly offers double for wheat. Then, the wheat farmer sells all of his wheat to China, and everyone else starves.
It’s called scarcity. It’s an inherent condition of our world and has nothing to with the “market failure”. The market is the way to ration resources, goods and services.
Is it a market failure that there’s only one genuine Mona Lisa?
Everyone else starves? No, they just have to pay more for wheat.
Of course, your dad could have easily given the opposite scenario as a possible “failure”. China pays half for wheat, wheat prices drop, farmers go out of business, everyone starves.
In other words, whatever price wheat is selling for today is the proper price; any change would cause it to become the wrong price. What a coincidence it is that all products today are selling for their one and only correct price!
Hayek’s “The Use of Knowledge in Society” seems like the obvious choice.