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Poverty and Market Policies

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How can a market still leave some people in a suboptimal economic situation? Is poverty a market failure or a negative externality? If poverty is a market failure, do you think this gives credence to the government's action to fight poverty?

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The solution provides information, insight and advise on the topic of markets, economic stability and government policies against poverty.

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Libertarian approach to economic inequality: http://mises.org/humanaction/chap15sec7.asp
Anarchist approach from P.J. Proudhon: http://marxists.org/reference/subject/economics/proudhon/philosophy/ch06.htm
Liberal approach from the journal, "Monthly Review" http://monthlyreview.org/2004/02/01/poverty-and-inequality-in-the-global-economy

The question your professor poses is a common one, and there are many ways to present the material. I have given you three important sources for theory on these matters, all from important and significant sources. As you know, I cannot do the paper for you, but I can give you a few ideas:

1. For the libertarian, inequality is the result of the state. In many ways, the issue between anarchist and libertarian approaches can be broken down this way:
For the libertarian, the state has no right to interfere in the market. When it does, it is either responding to political pressure, or just as harmful, it is responding to the demands of the economic elites to protect their position.
For the anarchist or other social radical, this eventual cooperation between the state and the corporation is an essential part of capitalism's development.

2. So the issue is then the results of money in politics. For the libertarian, politics is ...

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