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Market Failure, Public Policy, State’s Philosophy Essay

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Updated: Aug 6th, 2020

On Market Failure

Market Failure and Government Failure: Definition

The cost of mistakes is rather high once they are made on a societal level and, therefore, define the well-being of a specific demographic. The situation in which the decisions made by an individual based on their needs do not lead to the benefit of the group is typically defined as a market failure. The government failure, in its turn, is a scenario in which the actions of the government aimed at addressing the market failure not only have no positive effect but also result in an even more deplorable situation, particularly, a poor allocation of the state resources. As a result, the government fails to protect people and their constitutional rights.

Which Definition Fits Best

When considering the definitions provided above, one should admit that the latter seems to have more in common with my final paper since it creates a link between the economic factors and the political ones.

Market Failures as a Result of Negative Externalities: Examples

The emergence of a monopoly in the target market setting can be viewed as a canonic example of a market failure. For instance, the situation in which the construction industry is only represented by a single organization in the target market, which sets unreasonably high prices, can be deemed as a market failure. Although it does not necessarily imply that the customers are going to suffer, it creates prerequisites for unfair pricing strategies.

In the identified case, the government may react by imposing taxes on negative externalities upon the construction company in question. It should be noted, though, that draining the company financially will not lead to the creation of a healthy competitive environment. Therefore, the identified strategy does not seem appropriate in the identified case. Alternatively, the government may consider creating a friendlier environment for new entrants into the target market. In contrast to the approach mentioned above, this framework suggests that the very foundation for monopoly will be destroyed and, therefore, should be considered the superior one.

Public Good: Example

The concept of a public good implies that the so-called “free riders” can enjoy the benefits of specific products or services without paying for them. For instance, if one buys an electronic version of a book and uploads it on the Internet for everyone to download it for free, the publisher and the author will suffer significant losses. The identified concept can be viewed as a component of the market failure theory as it implies that the individuals benefitting from the free product do not contribute to the economic progress of the target market.

On Public Policy

Policy Type and Foundation

In the wake of the environmental awareness and the promotion of sustainability principles, the Climate Change Policy of the United States seems to be gaining increasingly large significance. The foundations of the policy in question can be deemed as multifaceted since it affects the lives of people on a number of levels and in a range of domains, from business-related one to the one of household management. The policy under analysis can be described as procedural since it focuses on the way in which certain goods should be produced, and specific services must be delivered. Indeed, the environmental policy focuses on the measures that companies must follow so that the threat to the environment, particularly, the effects of the factors that contribute to the climate change, should be minimized.

Policy Goals and Its Political Feasibility

The policy is aimed at reducing the negative effects that the processes related to the goods production, their transportation, etc., have on the environment.

Political Hurdles

Although the policy under analysis is rather basic and quite legitimate, it took a significant effort to promote it. Supported primarily by activists and lobbyists, the new framework for managing resources was rejected initially by companies. The response of the latter was quite understandable given the fact that the entire supply chain had to be redefined in order to meet the new standards.

Major Benefit and Major Cost

However, the policy has had an impressively positive impact on the state economy and policy. For instance, a more sustainable use of resources created premises for a more efficient performance of the organizations and, therefore, greater profits. Naturally, the expenses for the change in the companies’ design, as well as the measures for addressing the protests of numerous for-profit organizations, have had their toll on the economic and political situation in the U.S.

Feasibility

However, given the positive implications that it has in store for the U.S. economic landscape, the policy can be viewed as financially feasible. A different principle of resources allocation, which implies a more sustainable approach to managing corporate assets, will spur the economic growth of the state.

Liberal, Conservative, or Neither

The climate change policy mentioned above can be considered politically neutral. Although it does rely on an innovative approach and promotes changes, it does not have the distinctive liberal air about it. However, given the focus on change, which it implies, it cannot be viewed as conservative, either. In other words, the policy should be interpreted as detached from the political issues and focusing on the problems that concern all members of the population disregarding of their political stance.

On the Philosophy of the State

Vision of the Social Contract

Although both Locke and Hobbes built the foundation for the Social Contract Theory, their opinions on the subject matter were radically different. According to Locke, the concept of the Social Contract implies that the citizens of the state must follow the existing regulations and comply with the provisions of the justice system in exchange for impartial justice. Hobbes, in his turn, promotes a more authoritative interpretation of the Social Contract, suggesting that a person may receive the right to live as long as they follow the established standards for justice and social behavior.

Leviathan and the American Public Policy Domain

Although the current system of social justice in the United States leaves much to be desired, it does not seem to create the premises for Hobbs’s interpretation of the Social Contract described in Leviathan to become a part of the reality. However, one must agree that the contemporary U.S. justice system could use a significant improvement, especially as far as the issue of equality is concerned. Nonetheless, there are currently no reasons to assume that the state regulations should be used against the American citizens to silence them and make them follow the suggested behavioral models blindly.

Characteristics of the American Social Contract

Federalist Papers and the Ratification

In retrospect, the concept of the Social Contract became the foundation of the United States since its elements were used by the Founding Fathers as the means of establishing the American justice system. The Federalist Papers, which included 85 essays, convinced the residents of New York to accept the Constitution as Jefferson and Madison saw it.

“If Angels Were to Govern Men…”: Interpretation

Particularly, the Federalist $51 that starts with “If angels were to govern men…” points to the necessity for people’s actions to be coordinated by state regulations since people are prone to misjudgment.

Balancing Power

The balance of powers in the U.S. legal system is carried out by separating the powers into legislative, executive, and judicial ones.

How a Bill Becomes a Law

Similarly, the process of a bill being turned into law implies that it should be not only passed in the Senate and the House of Representatives but also receive the Presidential approval.

How the Law Is Implemented

The representatives of the Executive power implement the law by addressing a specific case.

How the Constitutionality is Affirmed

As far as the affirmation of the law and its constitutionality, the Supreme Court needs to take actions and consider the possibility of affirming the regulation in question.

On How I Will Measure My Life

General Assumptions

Happiness in Career

Although life is not typically viewed as something that can be calculated, Christensen (2010) insists that it is possible to measure it successfully. The author referred to career choices in his work. Applying his statements to my life, I must mention that I need not only essential benefits but also career opportunities such as training options, courses, etc., to be happy in my career.

Happiness in Family Life

As far as the family life is concerned, the issue of family support needs to be mentioned as the source of enduring happiness.

Staying out of Jail

Furthermore, the issue of complying with the law needs to be addressed. In order to stay away from jail, I will have to be aware of not only my rights but also my responsibilities, as well as the boundaries set by the U.S. law.

What the Article Says

The identified concept of happiness aligns with the one suggested by Clayton M. Christensen. Indeed, he mentions that it is important to build rewarding relationships with the spouse and focus on communicating with the children.

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1. IvyPanda. "Market Failure, Public Policy, State's Philosophy." August 6, 2020. https://ivypanda.com/essays/market-failure-public-policy-states-philosophy/.


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IvyPanda. "Market Failure, Public Policy, State's Philosophy." August 6, 2020. https://ivypanda.com/essays/market-failure-public-policy-states-philosophy/.

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IvyPanda. 2020. "Market Failure, Public Policy, State's Philosophy." August 6, 2020. https://ivypanda.com/essays/market-failure-public-policy-states-philosophy/.

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IvyPanda. (2020) 'Market Failure, Public Policy, State's Philosophy'. 6 August.

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