Duke professor explains how financial markets are designed for failure

While economics students are familiar with the concept of “market failure,” Duke professor John Staddon uses the term in a different way.

Traditionally, market failure deals with cases in which free markets fail to yield outcomes that are economically efficient. But Staddon ? applying the term to financial markets ? contends that those markets are designed for failure or disaster.?

He made his case during a presentation today to the John Locke Foundation’s Shaftesbury Society. In the video clip below, Staddon offers suggestions for improving the system.

2:35 p.m. update: Click play below to watch the full 46:55 presentation.

You’ll find other John Locke Foundation video presentations here.