Sunday, August 26, 2007

Business, Not Market, Failure

With the return of Real Time with Bill Maher this past Friday, Maher's tackled Chinese imports with a well-worn fallacy: bad business means a failed market. The two are rarely one in the same. When a business make a bad decision and they are punished for it (as Chinese manufacturers are experiencing) that's a success of market activity.

The costs of such sloppiness is exactly why we can trust markets to handle so many complicated problems. It is not perfect, but compare mistakes made by CEOs to those of politicians. In government, blame is more likely to be passed than shouldered; failure is more likely to persist than be purged.

No comments: