That was an excellent talk by Prof. Margolis. You have to wonder if those who insist that we get market failures when we rely on open competition really think we’d be better off if we turned decisions about technological paths over to politicians and bureaucrats. Even if you believe that sometimes the market process leaves us on a sub-optimal path (I don’t think there is any evidence that it has, but for the sake of argument, let’s assume that it’s possible), why on earth would you expect better results by entrusting the matter to a group of people who don’t stand to gain if they’re right or lose if they’re wrong? And wouldn’t we expect those people to be subject to great pressures from politicians and special interest groups?
And talk about “locking in.” What is more resistant to change than a governmental edict?
The idea that government can improve upon the decisions of market participants is absurdly unrealistic.
