When Deregulation Makes Things Worse Before They Get Better

Paul Samuelson

Chapter 2 in Competition and Markets, 1990, pp 11-20 from Palgrave Macmillan

Abstract: Abstract Under perfect competition Smith’s Invisible Hand is understood to avoid deadweight losses and other inefficiencies. By contrast with private property, the push — shove equilibrium on unappropriated lands leads to various tragedies of the Common. We owe to A. Young’s (1913) correction of Pigou’s mistake (concerning increasing-cost industries and pecuniary external diseconomies) the demonstration that competitive rent-collecting achieves social efficiency (à la Pareto if not Bentham-Bergson). D.H. Robertson (1924) and F.H. Knight (1924) have developed Young’s insight and in later editions of Economics of Welfare Pigou finally conceded the point.

Keywords: Marginal Product; Product Curve; Deadweight Loss; Partial Privatisation; Common Land (search for similar items in EconPapers)
Date: 1990
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DOI: 10.1007/978-1-349-10510-6_2

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