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A Note on the Canard of "Asymmetric Information" As a Source of Market Failure

The Quarterly Journal of Austrian Economics

Tags Interventionism

07/30/2014Thomas J. DiLorenzo

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Volume 14, Number 2; Summer 2011

 

The notion that so-called asymmetric information is a source of market failure is deeply flawed. Asymmetric information is essentially a synonym for “the division of  knowledge (and labor) in society,” which is the whole basis for trade and exchange and the success of markets. The real asymmetric information problem, moreover, is with government, since all taxpayers are rationally ignorant of almost everything government does. Asymmetric information is therefore a source of government failure, not market failure.

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Contact Thomas J. DiLorenzo

Thomas DiLorenzo is a former professor of economics at Loyola University Maryland and a member of the senior faculty of the Mises Institute. He is the author or co-author of eighteen books including The Real Lincoln; How Capitalism Saved America; Lincoln Unmasked; Hamilton's Curse; Organized Crime: The Unvarnished Truth About Government; The Problem with Socialism; and The Politically-Incorrect Guide to Economics. 

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Cite This Article

DiLorenzo, Thomas. "A Note on the Canard of "Asymmetric Information" as a Source of Market Failure." The Quarterly Journal of Austrian Economics 14, No. 2 (Summer 2011): 249-255.