Empirical Evidence of Market Corrections to Address Economic and Social Goals

This chapter reviews the empirical evidence of market corrections that have helped to address economic and social goals that government policies have failed to address efficiently in the book, Market Corrections not Government Interventions: A Path to Improve the US Economy. I draw on scholarly evidence in articles and books and supplement that evidence with descriptive evidence in media publications. Evidence is presented for market corrections that occur independently of government policies, market corrections that government has facilitated by significantly withdrawing a policy intervention that prevented a market solution, and preliminary market corrections in the sense that they have modestly but not significantly increased social welfare but they have the potential to substantially increase social welfare in the future if a major technological advance occurs that allows the initial correction to evolve fully. Market corrections that have occurred independently of government policies and improved social welfare include generating additional sources of competition to reduce alleged market power, advances in information technology, developing new innovations, increasing job opportunities and transportation access to labor markets, and technological innovations and new sources of competition that have improved alternatives for the public to obtain merit goods. Market corrections facilitated by government policy reforms include deregulation, which has greatly benefited consumers by increasing firms’ productivity and efficiency and technological advance, and the emergence of private companies, such as ridesharing, which are able to compete with public services. Market corrections that have the potential to produce large benefits include technological innovations to reduce the social costs of negative externalities and new actions to reduce discrimination toward all types of people.