“As regular readers will know, I’m about as froth-mouthed free market as it is possible to get without descending into Randian lunacy,” Tim Worstall writes for The Register. “Yet even I support government interventions into the economy at times: it’s only the times and methods used that are to be argued about.”
“A case in point is the existence of the patent system,” Worstall writes. “I’m not about to claim that everything is peachy with the system we currently have, but this is a walk through of why economists, and yes, even froth-mouthed free marketeers, think that we need something like it – even if not exactly what we’ve got.”
“The basic problem is something called ‘public goods,'” Worstall writes. “No, these are not things that the public likes, nor what the public wants. Nor is it particularly the things that would be good for the public. It’s, strictly speaking in the jargon, things that are non-excludable and non-rivalrous. In any form of a free market or capitalist system (the two are very different ideas: one refers to how goods and services are distributed, the second to who owns the productive assets) these public goods also pose a particularly thorny problem.”
Much more in the full article here.