of the economy. Healthcare is a market failure. So someone invented something called insurance which gets healthy people to share in paying for the sick with insurance premiums. The US healthcare system with private insurance then failed by having too many people who could not afford to be insured resulting in bankruptcies and 45,000 deaths a year. So Obama care came into play. That is what I mean by market failure and government involvement in the market. Now Trump has chipped away at it while the people have been informed that single payer results in even better outcomes for keeping costs down and covering all, both values efficiency and equity are better in a single payer plan, so hopefully Obama care will give way to something better. So too the market fails in r&d and secrecy so the government does some of that. Like inventing the internet which was government defence and is now private industry. Or running NASA. Now the market can handle r&d on putting satellites into orbit so that is often done through private industry now and things are more efficient in private satellite launching. Again you have values of equity and values of efficiency. The market will meet those values or not. If it doesn't, you have market failure. Different parties have different values. When the markets work - great privatize. When they don't regulate.
Here is something that summarizes the types of market failure.
https://www.economicsonline.co.uk/Market_failures/Types_of_market_failure.html
Types of market failure:
A market failure is a situation where free markets fail to allocate resources efficiently. Economists identify the following cases of market failure:
Productive and allocative inefficiency
Markets may fail to produce and allocate scarce resources in the most efficient way.
Monopoly power
Markets may fail to control the abuses of monopoly power.
Missing markets
Markets may fail to form, resulting in a failure to meet a need or want, such as the need for public goods, such as defence, street lighting, and highways.
Incomplete markets
Markets may fail to produce enough merit goods, such as education and healthcare.
De-merit goods
Markets may also fail to control the manufacture and sale of goods like cigarettes and alcohol, which have less merit than consumers perceive.
Negative externalities
Consumers and producers may fail to take into account the effects of their actions on third-parties, such as car drivers, who may fail to take into account the traffic congestion they create for others. Third-parties are individuals, organisations, or communities indirectly benefiting or suffering as a result of the actions of consumers and producers attempting to pursue their own self interest.
Property rights
Markets work most effectively when consumers and producers are granted the right to own property, but in many cases property rights cannot easily be allocated to certain resources. Failure to assign property rights may limit the ability of markets to form.
Information failure
Markets may not provide enough information because, during a market transaction, it may not be in the interests of one party to provide full information to the other party.
Unstable markets
Sometimes markets become highly unstable, and a stable equilibrium may not be established, such as with certain agricultural markets, foreign exchange, and credit markets. Such volatility may require intervention.
Inequality
Markets may also fail to limit the size of the gap between income earners, the so-called income gap. Market transactions reward consumers and producers with incomes and profits, but these rewards may be concentrated in the hands of a few.
