Tag: market failure

Billions of plastic bags are used and discarded each year around the world and these cause considerable environmental damage – a form of market failure. In this podcast we consider the extent of the problem and policies that countries around the world are adopting to try to minimise this market failure. Many countries, including China, have banned single-use plastic bags completely, while others, such as Ireland, have chosen to tax them to try to limit their use.

Britain’s recycling strategy is under risk following a collapse in waste paper prices. Three quarters of UK waste paper is exported to Far Eastern buyers, but demand from this region has collapsed in recent months. The price collapse has led to a surplus of recyclable paper and some local authorities have proposed using Ministry of Defence (MoD) sites to store the waste while there is no market or use for it.

Paper price collapse blows hole in Britain’s recycling strategy Guardian (11/11/08)
Recycled waste could be stored on MoD bases Guardian (16/11/08)


  1. Define the terms (i) private cost and (ii) external cost.
  2. What are the external costs resulting from disposing of waste paper and other recyclable products in landfill sites?
  3. Using diagrams as appropriate, illustrate the changes that have taken place in the market for waste paper.
  4. Evaluate two strategies that the government could adopt to increase the price of waste paper.
  5. Discuss the likely success of a policy of storing waste on MoD sites to await an upturn in the recycling market..

The current financial crisis has led many to wonder whether this may mark the ‘death of capitalism’. While this may almost certainly be an over-statement, it may mark a fundamental sea change in the way in which we oversee and manage a capitalist system. The articles below look at some of the implication of this possible change in approach.

Positive thinking Guardian (18/10/08)
A category error Guardian (10/10/08)
History can guide, yet there are new limits of the possible Guardian (10/10/08)
I’ve watched the economy for 30 years. Now I’m truly scared Guardian (28/10/08)
The new New Dealers Guardian (26/9/08)
Europe and America in the shadows as a new era dawns Telegraph (26/10/08)


1. Explain what is meant by a capitalist system of economic organisation.
2. Assess the extent to which a ‘soft-touch’ regulatory approach can be blamed for the current financial crisis.
3. Discuss the extent to which greater levels of government intervention and economic regulation are likely to result from the current financial crisis.
4. Are we witnessing the death of capitalism?