Drugs and Free markets: Are they compatible ?
While I did not have the time to develop the arguments to the extent i would have wanted to, here it goes...
I was wondering whether drugs (narcotics - including both hard and soft drugs) and free markets are compatible. Whereas some liberals will argue that narcotics should be left to individual choice, I am not very sure that individual choice would be optimal in this case. Let me explain why.
Two very important preconditions to a efficient free market mechanism is the absence of information asymmetry and a highly effective legal system. Leave alone developing nations such as India , I am not confident that these are present effectively even in developed nations. This is especially true in the context of information asymmetry.
Thus, when two basic prerequisites for intended market outcomes are absent, free markets cannot be expected to lead to optimal outcomes. In this case, since drug users
posted by Varun Khandelwal @ 3:01:00 PM
3 Comments:
thanks aditya...nice article..
do you wanna discuss it ??
i couldnt exactly figure what they meant when they were refering to externality...was it
a) the disutility/cost other ppl have from having an alcoholic around ??
b) the cost of healthcare/accidents ???
from the way im looking at it right now, option (b) doesnt hold much water...
option (a) opens up the age-old debate on the seperation/extent of private and public domains
thanks aditya...nice article..
do you wanna discuss it ??
i couldnt exactly figure what they meant when they were refering to externality...was it
a) the disutility/cost other ppl have from having an alcoholic around ??
b) the cost of healthcare/accidents ???
from the way im looking at it right now, option (b) doesnt hold much water...
option (a) opens up the age-old debate on the seperation/extent of private and public domains
i remember that discussion.. its gonna be a political disaster if the govt has to privatise it.. but the current structure is unsustainable i guess..
i whole heartedly agree with you aditya..free markets cannot prevail as they are conceptualised. id say forget india, they cannnot prevail anywherer. and even if the could prevail, the outcomes would not be very desirable..
again, a digression:
here i think we should reconsider how mainstream economics works today..most of the subjective analysis has been ruled out. economics is now about data and proof. where objective analysis cannot be undertaken, the research is not considered credible.
perhaps some of you are aware of what political economy is as a subject. i think its very important that people understand and relate to a non-data/non-proof based assessment of our economy/lives. it is only then things can be explained properly..
perphaps i'll put up a post on incentives as regards this
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