MS had better products than everyone else. It was a market success.
> * Too little being done to reduce CO2 emissions, since emission costs are externalized and delayed
This is within a libertarian government's purview. Negative externalities should be regulated since it's protection of citizens.
> * Broadband providers in the US
Government authorized duopolies / monopolies, not a market failure.
> * EpiPen pricing
Result of current laws, not a market failure.
> * Essentially every Health and Safety regulation ever exists to fix a market failure. In the small government world, employers see no cost of workers dying of lung cancer in their 60s from breathing asbestos, etc.
Companies have an incentive to avoid harming their workers. It has a significant negative impact on their reputation and workers could seek civil damages.
> * EpiPen pricing
My understanding was that part of the problem with the EpiPen was a monopoly due to patent issues. Patents are monopolies created by the government, so the market failures they cause are in fact government failures.
http://blogs.sciencemag.org/pipeline/archives/2012/03/08/ero...
And, well, medicine ain't all it's cracked up to be:
https://ello.co/dredmorbius/post/msqfdpan_0xudzuorebfbg
Which is to say, you're vastly better off investing in public health measures than in intensive medical interventions.
(See Laurie Garrett, The Coming Plague, for more on that theme.)
I think we can all agree that drug patents in particular are a necessary evil. On other patents (in particular software) I'm a lot more skeptical. And that's not to say "Big Pharma" isn't trying to abuse the system to maximise their profits.
I could imagine some models to make them less evil, for example by having a scheme that forces companies to grant fairly priced licenses to their competitors. Or, for drugs whose availability is in society's general interest, a government reimbursing the development costs. For both of these one would need a fair way of determining development costs, but as far as I understand pharma research already has a detailed paper trail to make sure their patent applications are bullet-proof.
That's why I said these models are not exact. They still work ok; instead of being Pareto optimal we're epsilon-Pareto optimal. With some form of small government managing large-scale many-party contracts, we can bring the overhead of Coase-style externality management down very low.
> Too little being done to reduce CO2 emissions,
Again, via Coase, we could find an approximately correct internalization incentive via increasing the purview of trespass law. Polluting would involve the purchase of easement rights. This would be very hard to organize with no government, but feasible with a small government.
> Microsoft monopoly in the late 90s
The government didn't solve this problem, they contributed to it. One of the reasons MS got so huge was federal procurement contracts. The MS monopoly got busted up because other companies (namely Apple) started making better computers, and now we also have Google and Linux in the fold in a major way.
> Broadband providers in the US
This is the fault of regional government line leasing rules, which prevent competition by only allowing one company (maybe 2) to service a building at a time. If the government were behaving optimally, either from a social good or profit-making perspective, we would have more ISPs per building in most places, leading to actual competition.
> EpiPen pricing
FDA's fault. http://slatestarcodex.com/2016/08/29/reverse-voxsplaining-dr...
> Essentially every Health and Safety regulation ever exists to fix a market failure. In the small government world, employers see no cost of workers dying of lung cancer in their 60s from breathing asbestos, etc.
This was fixed because of legislative pressure by labor unions, not out of the charity of the government. If the government decided they weren't responsible for this, unions would just have taken a different approach. Probably just some sort of insurance contract internalizing the risk of contracting a work-related injury or illness.
> I could go on.
Please do; nothing you've said so far has been very compelling.
Which only holds when transaction costs are negligible, i.e., never. Which was precisely Coase's point in that work - he showed that mathematically, it doesn't matter what initial distribution you put on something (his example was radio broadcast frequency allocations), since the final Pareto-optimal distribution is independent of initial conditions. This is the Coase theorem. But as soon as you include transaction costs, the theorem fails to hold, and initial distribution is important.
A few obvious market failures:
* Microsoft monopoly in the late 90s
* Too little being done to reduce CO2 emissions, since emission costs are externalized and delayed
* Broadband providers in the US
* EpiPen pricing
* Essentially every Health and Safety regulation ever exists to fix a market failure. In the small government world, employers see no cost of workers dying of lung cancer in their 60s from breathing asbestos, etc.
I could go on.