Are you ready for global market failure?

I have been trying to get my car fixed (a 12 yr old Subaru) for about 9 months. The parts had to come from Japan … at least that is what they said … I waited 8 months and the wrong part had been ordered. So I asked the repair shop to order the right part … one month later it has still not turned up.

There are plenty more examples like this … for example the entire electricity grid on the eastern seaboard of Australia suffered market failure a couple of months back … the regulator had to step in and suspend the market. There are people saying the the Ukraine war may have to end because both sides depend on weapons guided by microchips and that the world is running out of chips.

WBT received this feedback from a reader in the UK:

“Ah, market failure, following hard on the heels of govt deregulation. In the 2008 financial crisis the (British) govt had to bail out at least one bank and one building society. More recently, they’ve stepped  in to take over failing/underperforming rail and bus companies. And this year it’s been the energy market that’s required govt intervention.  All outfits were set free by ideological moves “to open up the markets.” It’s therefore probably better  described as “government failure.” 

Brexit collapse

Market failure in Australia’s Electricity Grid

As professor John Quiggin has observed: “The national electricity market is a failed 1990s experiment. It’s time the grid returned to public hands.” (Quiggin, The Conversation, 22 June, 2022). Other energy experts have reached similar conclusions. For example, Dr Roger Dargaville, Deputy Director of the Monash Energy Institute, stated that due to privatisation, “the actual focus of the industry is not to be efficient but to maximise shareholder profit (which may involve being more streamlined, but not necessarily). And so the primary role of the energy sector to provide general benefits to Australian residents and businesses has been lost.”

Britannia, an unchained melody

– Ian Curr, Ed., 16 Nov 2022.