If you were awake during your Intro to Micro class, you might remember the topic of market failures. Generally, markets lead to efficiency. Market failures are situations where the market does not provide for an efficient result. People making decisions in their own self-interest, under these circumstances, make things worse for the masses. The fight over what is a market failure and the government’s response is the crux of economic and political debate.
Both International and national Markets generally supply goods and services the most efficient way possible. Blockchain will slowly shine a light on the inefficiency of many government solutions to market failures. Economists and public policy analysts have barely scratched the surface of how blockchain can offer solutions to traditional market failures. Blockchain has the potential to increase choice. Consumers will make decisions based on their preferences. This will push out our production possibility curve, allowing us to do more with less, lessening the burden of scarcity and fight against rent-seeking. Additionally, it can reduce central planning and the misallocation of resources that accompany it. The traditional way of corrupt, inefficient, and expensive government solutions to these failures now will have competition. In free societies, logic, efficiency, and productivity usually win. I’m betting on blockchain.