Quarterly Journal of Austrian Economics

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

The Quarterly Journal of Austrian Economics

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.


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.

All Rights Reserved ©
What is the Mises Institute?

The Mises Institute is a non-profit organization that exists to promote teaching and research in the Austrian School of economics, individual freedom, honest history, and international peace, in the tradition of Ludwig von Mises and Murray N. Rothbard. 

Non-political, non-partisan, and non-PC, we advocate a radical shift in the intellectual climate, away from statism and toward a private property order. We believe that our foundational ideas are of permanent value, and oppose all efforts at compromise, sellout, and amalgamation of these ideas with fashionable political, cultural, and social doctrines inimical to their spirit.

Become a Member
Mises Institute