Normative Positions and Market Failures - The Implications of Political Ethics on Cures for Market Failures

Sammanfattning: In this essay I discuss different normative foundations - theories of political ethics, for proposed cures to market failures. In addition to empirically match what cure fit what type of market failure, I posit the notion that the normative position of an economist, or policy maker, or of a group, concerned with these problems, delimits the options available for recommending, or analysing, what corrective measures that needs be taken to restore markets to efficiency. Two theoretical normative positions, one utilitarian and one libertarian, is constructed to argue the point that different normative positions will yield different permissible actions. The analysis is conducted against the background of different rational choice models, i.e., 'thin' and 'thick' rationality, both of which has profound impacts on both the theory of market failure itself, and on the proposed cures.