@IvanAndreevich Just move to a country that doesn't have a minimum wage and enjoy the great fabulous standard of living there. Have fun. But before you do, check out the unemployment in states that have higher minimum wages and see if they are higher than in ones with lower minimum wages. You'll find there's really no correlation. Higher minimum wages ==>more buying power ==>more economic activity ==>more jobs.
Mr Holden, I'm confused.. Is the MC curve for all types of firms equivalent to the supply curve? Or is it only for perfectly competitive firms? Thank u very much! I've been watching your videos and got by 1 year of work in 3 weeks :D
Ah, I loved the dentist example, as that is actually something that happened in Norway not long ago. To check if this claim was true, a group of people decide to go to several dentists (within two days, so not much happen to your teeths in two days) and ask if there were any problems. The result were scary. Some found one hole, others found two, some found none (maybe they had a fine business already) and so on.
Great videos paj, if you have time can u make a video about road pricing, franchishing and CBA( and COBA) please. Would be great if you could got my exam coming up soon and couldnt find anything on it on your channel about them. Thank you.
your example of negative externalities were poor. a better one that most libertarians always try to avoid is how pollution from factories cause breathing problems to third non-involved parties. this goes back to the argument of capping pollution from these huge corps, and the argument that these polluters should not pay for ther damages to third non-involved parties (free market).
@LouieDaProtectionist the bigger issue you failed to provide with negative externalities is that "Does a negative externality from a factory smokestack cause climate change which in turn causes natural disasters?".
Amazing video! Just a quick question. What exact government legislation can be used to correct asymmetric information and reduce exploitation from mainly suppliers?
@MrGeodude5 I suppose the obvious action for a government to take would be basic regulations. These would be things such as a lack of cold calling, price comparison, a RRP (recommended retail price), public campaigns to widen knowledge of exploitation.
I'm no expert and Pajholden would probably pipe me down immediately, but as no one has answered you and I presume you have an exam tomorrow I thought I'd give you some ideas. Hope this helps.
@louisparr I have great respect for the few people, be it teachers/doctors/politicians that go the extra mile and help out for that intrinsic reason.
To be fair to other teachers however, I believe that when one teaches at A Level, it is more to do with a lack of class discipline that disrupts learning than that of a teachers knowledge. Teaching A Level subjects to large classes is a tough thing due to the difficulty of the syllabus, if one person disrupts it can be hard for a teacher.
I with this video. I believe that government involvement in the market should be minimal, but it needs to be present if we are to live in a civilized society. I am constantly ridiculed by these free market cheer leaders every time i even suggest that market failure even exist. and they always tell me its governments fault. and in some or even most cases it might be true. i believe in capitalism. but i cant bring myself to believe that its perfect.
@000TheGingerOne000 I think so, except for negative externalities because he uses the cost and benefit diagram while in ocr we just use the demand and supply diagram.
Just went over a 4 month course with your videos and understood it better than as it was taught to me in my high school in less than an hour. Thank You!
Nice video! I must say I don't agree on unstable prices being a market failure. It can be a problem as you say, sometimes solved with futures, but a problem does not automatically constitute a market failure. As for labor market failure, Keynes blamed sticky prices, which brings to mind that you might want to generalize "labor market failure" to "sticky prices failure" or perhaps "sticky behavior failure", which would occur when market actors respond to market incentives to slowly. Thanks!
@JesseForgione He is literally explaining the key concepts we need for our exams, it quite inspiring really as he does it so concisely and in an understandable manner. I use his videos regularly to unsure understanding of these key principles after lessons, so I think your comment is totally unjustified. Cheers pajholden.
Well when you're done with your exams, I recommend reading up on economics so you don't walk around thinking that what he's saying has anything to do with reality.
Hey pajholden, just a suggestion, you can make a systematic lecture series which explains all basic micro economic and macro economic concepts! That would really help people trying to learn economics at home, and everyone in general!
distribution of income is a major market failure. I'm interested why you didn't mention it?
Also - Labour failure (unemployment) can be caused by Government intervention with the introduction of a minimum wage (price floor), which creates a surplus of people willing to work.
This would be good source material for the Occupy protests. It explains the root of what I/they want but can't articulate: Some kind of government action to remedy as much of these failures as practical.
As a student of Econ, believer in managed markets and YouTube discussioner, I will reference this video in my disputes with Libertarian fundamentalists and otherwise unreasonable anti-Keynesians.
@anyfekinnamewilldo I think the focus is on classical market failure, and provides the case for government intervention. Consequences of policy would come later in macroeconomics.
And.... he presses STOP. Love it. Great explanation for why markets can fail.The better people can come to understand the limitations of market forces and possible corrective actions by government, the better off we are going to be in creating happier societies.Of course, your caveat at the end is right on target. Government can't always fix everything. But neither is it the case that all government action is bad and the market is always right.
How disappointing it is to hear an economics teacher attribute unemployment in US and Europe to market failure and not even consider the possibility that unemployment is itself caused by government policy or state created monopolies like central banks.
I would urge any students who are genuinely interested in economics to Google "Response to the Market Failure Drones" for a different perspective ;-)
@TheSpiritOfTheTimes If not the sole cause, certain government policies are definitely some of the causes of unemployment. For example, badly set minimum wages (e.g. too low/high/close to welfare), international trade policies, subsidies for certain corporations or industries over others, etc.
How can a minimum wage be understood, if not as a type of price fixing, with all the attendant consequences thereof?
Market failure happens, but it's not something that can go on for very long. Entrepreneurs make mistakes, but they pay through the nose for every one of them, and for every hour of delay during the readjustment process. The real danger is that institutional conditions can cause a great many errors to be made at the same time, and to go unnoticed for too long.
@TheSpiritOfTheTimes The weirdest criticism leveled at the free market in this video is "asymmetric knowledge". 04:55 I mean, what do you think would happen if a dentist started knocking out peoples teeth for no reason? Would his customers recommend him? Nope. Would they sue him..quite possibly. Would he still be in business a year later..no chance!
How can and why should every market transaction have "symmetrical knowledge" anyway. Very odd.
@anyfekinnamewilldo No thanx... that work was written by Tom Woods. On a scale of economic understanding, he falls somewhere between a Pet Rock and a Toaster Oven. I would prefer reading Schumpeter's "Theory of Economic Development" instead.
@heckler73 Not sure what you mean by "between a Pet Rock and a Toaster Oven" but it doesn't sound terribly complimentary! Tom Woods is an historian by trade with IMO an excellent understanding of economics..particularly from the Austrian school. There are literally dozens of free market orientated economists who have been debunking this market failure stuff for DECADES which to be frank has as much right to appear in curriculum text books as astrology.
@anyfekinnamewilldo Dozens of economists? Name 6, including their research papers, and I'll consider it. Your opinion is unsettled by empirical fact, so I don't know how you can delude yourself into considering the subject akin to "astrology".
For example, do you deny the existence of Externalities (e.g. dead rivers) and Asymmetric Info (e.g. Paulson's Abacus CDO deals with GS)?
What do Austrians tell you about Elasticity and its effect on Labour markets?
OK M Friedman, Rothbard, MacKenzie, Spulber, Machan, Russell Madden, D Friedman, Block to name but a few..I'm not listing their research papers you can find them yourself!
I am not denying that pollution happens or the existence of dodgy dentists or that unemployment exists but it is disingenuous to call these things market failures and naive to think the government has the answers.
BTW elasticity of what and it's effect on Labour markets LOL?
you've actually made my life SOO much better. i live in london and my teacher lept going on about how we're going to fail as i class but now i'm like "not if i got 'pajholden' on my side" :] hahahha
You spoke of too little competition in a market, but can there also be too much?
For instance, take the example of electricity, in which there were often small regional suppliers, but a more integrated firm covering all those regions would be able to supply cheaper (due to scope and scale associated with electricity production &distribution).
Thanks for your vids I have learned a great deal... Can I ask your opinion in regard to the Libertarian arguments that market failure wouldn't exist if we de-regulated markets..? I personally disagree with such a position but i'd be really interested to hear your opinion on the matter; if you care to express it of course.
good to watch something from you Mr Holden :) It's been a long time and the topic of the video is fresh, especially before the second wave of the financial crysis.
This is so helpful! Thank you for taking the time to make these videos - they are very much appreciated!
video2011th 3 hours ago in playlist Uploaded videos
I wish he was my economics teacher.
LeyWes 4 days ago
are resources money?
SonyCamry 5 days ago in playlist Liked videos
can someone explain allocative efficiency? ive read definitions but i dont get it? i cant picture it in my head
SonyCamry 1 week ago
To blame unemployment on market failure is pathetic. Remove the MINIMAL WAGE and remove extended welfare payouts. You'll see full employment ASAP.
IvanAndreevich 1 week ago
@IvanAndreevich Just move to a country that doesn't have a minimum wage and enjoy the great fabulous standard of living there. Have fun. But before you do, check out the unemployment in states that have higher minimum wages and see if they are higher than in ones with lower minimum wages. You'll find there's really no correlation. Higher minimum wages ==>more buying power ==>more economic activity ==>more jobs.
sinistar99 2 days ago
can you please do a video on bonds market and interest rate?
franb1231 1 week ago
I wish you were my teacher. You explain things clearly and in an interesting way.
SheaHuskey 2 weeks ago
Revision Sheets on Externalities and Market Failure available on our website, check out our channel for the link
revisionsheets 2 weeks ago
Comment removed
revisionsheets 2 weeks ago
Mr Holden, I'm confused.. Is the MC curve for all types of firms equivalent to the supply curve? Or is it only for perfectly competitive firms? Thank u very much! I've been watching your videos and got by 1 year of work in 3 weeks :D
blissterd 3 weeks ago
@blissterd all firms
Thewordofmouse 4 days ago
Thank God for youtube, and you too. XD
I left my book in the school. ._.
jusnaughty 1 month ago
a test tomorro :( eleventh hour revision with your youtube channel :)... please upload more videos.. especially on micro economics.
20Midz 1 month ago
Ah, I loved the dentist example, as that is actually something that happened in Norway not long ago. To check if this claim was true, a group of people decide to go to several dentists (within two days, so not much happen to your teeths in two days) and ask if there were any problems. The result were scary. Some found one hole, others found two, some found none (maybe they had a fine business already) and so on.
gulbirk 1 month ago in playlist Favorite videos 2
Great videos paj, if you have time can u make a video about road pricing, franchishing and CBA( and COBA) please. Would be great if you could got my exam coming up soon and couldnt find anything on it on your channel about them. Thank you.
mr1ncl1 1 month ago
Comment removed
mr1ncl1 1 month ago in playlist Uploaded videos
your example of negative externalities were poor. a better one that most libertarians always try to avoid is how pollution from factories cause breathing problems to third non-involved parties. this goes back to the argument of capping pollution from these huge corps, and the argument that these polluters should not pay for ther damages to third non-involved parties (free market).
btw, are you a libertarian?
LouieDaProtectionist 1 month ago
@LouieDaProtectionist the bigger issue you failed to provide with negative externalities is that "Does a negative externality from a factory smokestack cause climate change which in turn causes natural disasters?".
LouieDaProtectionist 1 month ago
Mr. Holden was my high school teacher :) He is the best (apart from being academically amazing, he is very funny).
7LadyD1 1 month ago
@7LadyD1 Wow, thank you - reveal yourself! Let me know who you are!
pajholden 1 month ago
@pajholden
You are welcome Mr. Holden. I miss your classes and your English! :)
Best Regards,
Darja
7LadyD1 1 month ago in playlist Liked videos
Keep up the videos, why am I paying to go to uni when I can just watch these?
AncientTulip 1 month ago
last minute revision ftw
IKMusic16 1 month ago in playlist Uploaded videos
4 dislikes? Obviously 4 economics teachers are jealous that their students are being taken away by a better lecturer
YASHTRON 1 month ago in playlist Uploaded videos
exam tomorrow! last minute revision with paj <3
wrathsy13 1 month ago 34
@wrathsy13 same :(
TomScrut 1 month ago in playlist Uploaded videos
@wrathsy13 sameee :'(
xXTestCrashDummyXx 1 month ago
@wrathsy13 same, mock exams suck
jabarshi 1 month ago
@mrgeogdude5 Things like transparent pricing for energy companies so that the customer can better select a suitable tariff
tovers93 1 month ago in playlist Uploaded videos
A couple of dollars or euros. HAHAHA he means a couple of dollars or a few hundred euros at this rate!
tovers93 1 month ago in playlist Uploaded videos
Amazing video! Just a quick question. What exact government legislation can be used to correct asymmetric information and reduce exploitation from mainly suppliers?
MrGeodude5 2 months ago
@MrGeodude5 I suppose the obvious action for a government to take would be basic regulations. These would be things such as a lack of cold calling, price comparison, a RRP (recommended retail price), public campaigns to widen knowledge of exploitation.
I'm no expert and Pajholden would probably pipe me down immediately, but as no one has answered you and I presume you have an exam tomorrow I thought I'd give you some ideas. Hope this helps.
CallyBads 1 month ago
@CallyBads cheers bro
MrGeodude5 1 month ago in playlist Uploaded videos
@MrGeodude5 ye i was thinking to myself the same question
aghiarasberry 1 month ago
i wish my economics teachers were as good as you...
louisparr 2 months ago in playlist Uploaded videos
@louisparr I have great respect for the few people, be it teachers/doctors/politicians that go the extra mile and help out for that intrinsic reason.
To be fair to other teachers however, I believe that when one teaches at A Level, it is more to do with a lack of class discipline that disrupts learning than that of a teachers knowledge. Teaching A Level subjects to large classes is a tough thing due to the difficulty of the syllabus, if one person disrupts it can be hard for a teacher.
CallyBads 1 month ago
Pleaseplease make a video on the corrections you lovely beautiful shining human being.
MyEccentricMind 2 months ago in playlist Uploaded videos
Thank you for making these videos! :) It's like having my own economics tutor who I can rewind and pause! :D
Monkman192 2 months ago
I with this video. I believe that government involvement in the market should be minimal, but it needs to be present if we are to live in a civilized society. I am constantly ridiculed by these free market cheer leaders every time i even suggest that market failure even exist. and they always tell me its governments fault. and in some or even most cases it might be true. i believe in capitalism. but i cant bring myself to believe that its perfect.
cyborganic99 2 months ago in playlist Uploaded videos
this is suitable for ocr yep?
000TheGingerOne000 2 months ago in playlist Uploaded videos
@000TheGingerOne000 as unit F581?
000TheGingerOne000 2 months ago in playlist Uploaded videos
@000TheGingerOne000 I think so, except for negative externalities because he uses the cost and benefit diagram while in ocr we just use the demand and supply diagram.
MyEccentricMind 2 months ago in playlist Uploaded videos
Thank you!!
arwin1064 2 months ago
make more videos! pleeaasseeee
samsyed23 2 months ago
yayayayayayyayayaaay Your videos are SO helpful :D
anon3339 2 months ago
Can you please make a video on fisher's equation or the monetary transmission mechanism :) It will be a huge hellp!!
thesorayastanley 2 months ago
Just went over a 4 month course with your videos and understood it better than as it was taught to me in my high school in less than an hour. Thank You!
BballKN94 2 months ago
make a video about the state of the euro economy
Huzayfa95 3 months ago
try and get partnership then these vids will be worth making = more videos : )
subwayisverynice 3 months ago
Aaaaaaannnddd he presses stop.
BADMANBUTTERS 3 months ago
Were you to busy trying to sort out Greece's economy to make videos?
tricky12321 3 months ago
You are the Khan Academy of macroeconomics! Google; give this man a million dollars, or even better; pound sterling!
MatteNoob 3 months ago 2
what about merit and demerit goods?
13Machao 3 months ago 6
@13Machao doesn't that just come under externalities?
0VoiceOfReason0 3 months ago
Excellent vid!
Neonangelon 3 months ago
Nice video! I must say I don't agree on unstable prices being a market failure. It can be a problem as you say, sometimes solved with futures, but a problem does not automatically constitute a market failure. As for labor market failure, Keynes blamed sticky prices, which brings to mind that you might want to generalize "labor market failure" to "sticky prices failure" or perhaps "sticky behavior failure", which would occur when market actors respond to market incentives to slowly. Thanks!
thimmyb 3 months ago
Lol. Why is anyone taking this idiot seriously?
JesseForgione 3 months ago
@JesseForgione He is literally explaining the key concepts we need for our exams, it quite inspiring really as he does it so concisely and in an understandable manner. I use his videos regularly to unsure understanding of these key principles after lessons, so I think your comment is totally unjustified. Cheers pajholden.
Luigi123456789Luigi 3 months ago
@Luigi123456789Luigi
Well when you're done with your exams, I recommend reading up on economics so you don't walk around thinking that what he's saying has anything to do with reality.
JesseForgione 3 months ago
Oh, and your videos are GREAT. maybe you can collaborate with thenewboston and make an economics tutorial series!
adijo123 3 months ago
Hey pajholden, just a suggestion, you can make a systematic lecture series which explains all basic micro economic and macro economic concepts! That would really help people trying to learn economics at home, and everyone in general!
adijo123 3 months ago
distribution of income is a major market failure. I'm interested why you didn't mention it?
Also - Labour failure (unemployment) can be caused by Government intervention with the introduction of a minimum wage (price floor), which creates a surplus of people willing to work.
Great video! Economics exam in a week...
TheRadioCore 3 months ago in playlist More videos from pajholden
@TheRadioCore If a misallocation of resources is caused primarily by a government then it would be a non-market failure.
timgeerdes 3 months ago
Great thanks!!
ejenene 3 months ago
yayyyyyyyyyyyyyyyyyyyyyyy
a new video
MyMrwrestling 3 months ago 24
hows life in greece?
subwayisverynice 3 months ago
This would be good source material for the Occupy protests. It explains the root of what I/they want but can't articulate: Some kind of government action to remedy as much of these failures as practical.
As a student of Econ, believer in managed markets and YouTube discussioner, I will reference this video in my disputes with Libertarian fundamentalists and otherwise unreasonable anti-Keynesians.
spikesmth 3 months ago
@anyfekinnamewilldo I think the focus is on classical market failure, and provides the case for government intervention. Consequences of policy would come later in macroeconomics.
TheBalhamboy 3 months ago
and he presses stop LOL
EDTVHD2 3 months ago
IM YOUR #1 FAN THANKYOU SO MUCH THIS HELPED ME WITH MY STUDIES ALOT!
cra0kalo 3 months ago
And.... he presses STOP. Love it. Great explanation for why markets can fail.The better people can come to understand the limitations of market forces and possible corrective actions by government, the better off we are going to be in creating happier societies.Of course, your caveat at the end is right on target. Government can't always fix everything. But neither is it the case that all government action is bad and the market is always right.
RationalRat 3 months ago
Comment removed
kusubos 3 months ago
Good stuff
ELIASGTR 3 months ago
How disappointing it is to hear an economics teacher attribute unemployment in US and Europe to market failure and not even consider the possibility that unemployment is itself caused by government policy or state created monopolies like central banks.
I would urge any students who are genuinely interested in economics to Google "Response to the Market Failure Drones" for a different perspective ;-)
anyfekinnamewilldo 3 months ago
@anyfekinnamewilldo People still believe this stuff? Really?
TheSpiritOfTheTimes 3 months ago
@TheSpiritOfTheTimes If not the sole cause, certain government policies are definitely some of the causes of unemployment. For example, badly set minimum wages (e.g. too low/high/close to welfare), international trade policies, subsidies for certain corporations or industries over others, etc.
Barrettatsumaki 3 months ago
@Barrettatsumaki
How can a minimum wage be understood, if not as a type of price fixing, with all the attendant consequences thereof?
Market failure happens, but it's not something that can go on for very long. Entrepreneurs make mistakes, but they pay through the nose for every one of them, and for every hour of delay during the readjustment process. The real danger is that institutional conditions can cause a great many errors to be made at the same time, and to go unnoticed for too long.
PanzerDivisionBOM 3 months ago
@TheSpiritOfTheTimes The weirdest criticism leveled at the free market in this video is "asymmetric knowledge". 04:55 I mean, what do you think would happen if a dentist started knocking out peoples teeth for no reason? Would his customers recommend him? Nope. Would they sue him..quite possibly. Would he still be in business a year later..no chance!
How can and why should every market transaction have "symmetrical knowledge" anyway. Very odd.
anyfekinnamewilldo 3 months ago
@anyfekinnamewilldo No thanx... that work was written by Tom Woods. On a scale of economic understanding, he falls somewhere between a Pet Rock and a Toaster Oven. I would prefer reading Schumpeter's "Theory of Economic Development" instead.
heckler73 3 months ago
@heckler73 Not sure what you mean by "between a Pet Rock and a Toaster Oven" but it doesn't sound terribly complimentary! Tom Woods is an historian by trade with IMO an excellent understanding of economics..particularly from the Austrian school. There are literally dozens of free market orientated economists who have been debunking this market failure stuff for DECADES which to be frank has as much right to appear in curriculum text books as astrology.
anyfekinnamewilldo 3 months ago
@anyfekinnamewilldo Dozens of economists? Name 6, including their research papers, and I'll consider it. Your opinion is unsettled by empirical fact, so I don't know how you can delude yourself into considering the subject akin to "astrology".
For example, do you deny the existence of Externalities (e.g. dead rivers) and Asymmetric Info (e.g. Paulson's Abacus CDO deals with GS)?
What do Austrians tell you about Elasticity and its effect on Labour markets?
heckler73 3 months ago
@heckler73 Hey relax..it's only economics :-)
OK M Friedman, Rothbard, MacKenzie, Spulber, Machan, Russell Madden, D Friedman, Block to name but a few..I'm not listing their research papers you can find them yourself!
I am not denying that pollution happens or the existence of dodgy dentists or that unemployment exists but it is disingenuous to call these things market failures and naive to think the government has the answers.
BTW elasticity of what and it's effect on Labour markets LOL?
anyfekinnamewilldo 3 months ago
God bless you !!!!!
you've actually made my life SOO much better. i live in london and my teacher lept going on about how we're going to fail as i class but now i'm like "not if i got 'pajholden' on my side" :] hahahha
lilcrazygirl1 3 months ago
doing this atm! you GOD!!! <3
Vikesh231 3 months ago
PAJ HOLDEN <3
Aiduhn 3 months ago
PERFECT! We are doing this in class atm!
Phantom9442 3 months ago
You are truly the best economics teacher on Youtube.
I just hope you keep making videos.
TheRagingVolcano 3 months ago 53
You spoke of too little competition in a market, but can there also be too much?
For instance, take the example of electricity, in which there were often small regional suppliers, but a more integrated firm covering all those regions would be able to supply cheaper (due to scope and scale associated with electricity production &distribution).
Scientisticsoviet 3 months ago
Thanks for your vids I have learned a great deal... Can I ask your opinion in regard to the Libertarian arguments that market failure wouldn't exist if we de-regulated markets..? I personally disagree with such a position but i'd be really interested to hear your opinion on the matter; if you care to express it of course.
MetaReaLizard 3 months ago
welcome back!
samsyed23 3 months ago
good to watch something from you Mr Holden :) It's been a long time and the topic of the video is fresh, especially before the second wave of the financial crysis.
radip 3 months ago