Alternate title: Dierdre McCloskey’s list of 108 fictional market failures

Are “market failures” real? Or are they make-believe entities (like the aether in physics) invented by economists to justify their preferred public policies and all manner of nefarious and ultimately counter-productive regulations?

As it happens, I recently discovered this long and rambling but devastating takedown of economics authored by the legendary Dierdre N. McCloskey (ungated version here). Among other things, Professor McCloskey not only rattles off a comprehensive and chronological list of 108 alleged market failures that economists have identified or invented in order to justify public regulation of economic activity, beginning with Thomas Malthus’s now-debunked population theory and concluding with Thomas Piketty’s jury-rigged world inequality database; she also shows how these putative or fictional market failures are essentially the equivalent of intellectual moral panics among the economists who peddle them.

For my part, while I agree with the spirit, if not the letter, of McCloskey’s scathing critique of contemporary economics, I have but one quibble with her list of imaginary market failures: “the failure to define property rights …” (See Item #53 on page 12 of the ungated version.) Properly speaking, from my law professor perspective, the failure to define property rights is what I like to call a “legal failure” — a shortcoming of the legal system that makes it much harder for people to truck, barter, and trade. I first presented my theory of legal failure in my contribution to the 2014 book Economics of the Undead (see here), and more recently, I applied my theory to outer space (here).