BEGINNER

Black Markets

FEBRUARY 21, 2013

Black markets arise when governments set restrictions on what goods and services individuals may purchase. Provision of these goods and services are taken over by persons willing to violate the law. Because of the artificial scarcity created by government policy, these parties face much less competition than they would in a free market and can therefore charge higher prices to consumers. Due to the illegal nature of operations in the black market, producers and distributors may take aggressive measures to defend their work against intrusion.

 

The Cost of the War on Drugs

 

Steve Horwitz - Regulation and Intervention

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December 2014

Unfortunately, educating people about phenomena that are counterintuitive, not-so-easy to remember, and suggest our individual lack of human control (for starters) can seem like an uphill battle in the war of ideas. So we sally forth into a kind of wilderness, an economic fairyland. We are myth busters in a world where people crave myths more than reality. Why do they so readily embrace untruth? Primarily because the immediate costs of doing so are so low and the psychic benefits are so high.
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