Market Failure in Context: Introduction

Market failure, conceived of as the failure of the market to bring about results that are in the best interests of society as a whole, has a long lineage in the history of writings on matters economic. The goal of the present volume is to explore the contexts within which “modern” (i.e., twentieth-century) notions of market failure were developed. The idea that markets could fail to perform in ways that best promoted the larger interests of society is as old as economics itself, and the question of the appropriate scope to be given to private action and to its collective alternative is one of the most crucial issues with which economic thinkers have had to grapple. Nevertheless, our understanding of the contexts—social, political, and intellectual—in which discussions and debates about market failure have played out remains limited and imperfect. It is our hope that the present volume will go some way toward addressing this lacuna, both directly and by stimulating additional scholarship exploring this important facet of the history of economics.