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The Limits of Market Efficiency


  • James M. Buchanan

    () (George Mason University)


The framework rules within which either market or political activity takes place must be classi?ed in the non-partitionability set under the Samuelson taxonomy. Therefore there is nothing comparable to the pro?t-loss dynamic of the market that will insure any continuing thrust toward more desirable rules. 'Public choice' has at least partially succeeded in getting economists to remove the romantic blinders toward politics and politicians as providers of non-partitionable goods. It is equally necessary to be hard-nosed in evaluating markets as providers of non-partitionable rules.

Suggested Citation

  • James M. Buchanan, 2011. "The Limits of Market Efficiency," Rationality, Markets and Morals, Frankfurt School Verlag, Frankfurt School of Finance & Management, vol. 2(38), January.
  • Handle: RePEc:rmm:journl:v:2:y:2011:i:38

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    References listed on IDEAS

    1. Johansson-Stenman, Olof & Martinsson, Peter, 2008. "Are some lives more valuable? An ethical preferences approach," Journal of Health Economics, Elsevier, vol. 27(3), pages 739-752, May.
    2. Paul Dolan & Rebecca Shaw & Aki Tsuchiya & Alan Williams, 2005. "QALY maximisation and people's preferences: a methodological review of the literature," Health Economics, John Wiley & Sons, Ltd., vol. 14(2), pages 197-208.
    3. Jose-Luis Pinto Prades, 1997. "Is the Person Trade-off a Valid Method for Allocating Health Care Resources?," Health Economics, John Wiley & Sons, Ltd., vol. 6(1), pages 71-81.
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    Cited by:

    1. Christoph Luetge & Thomas Armbrüster & Julian Müller, 2016. "Order Ethics: Bridging the Gap Between Contractarianism and Business Ethics," Journal of Business Ethics, Springer, vol. 136(4), pages 687-697, July.
    2. Diana Thomas & Michael Thomas, 2014. "Entrepreneurship: Catallactic and constitutional perspectives," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 27(1), pages 11-22, March.


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