Would this Burger King have closed if not for health inspectors?

[Mr Khan]

SamuelRSmith said:

Mr Khan said:

SamuelRSmith said:
As Friedman says, the Government should be the umpire, making sure nobody breaks the rules (such as this), not playing the game it self. The Government should be making sure that the restaurants are following the no-bugs rules; but never opening an "Obarmer King", itself.

Right, but what if there are no financial incentives for Burger King under the free market, but Burger King's existence produces public "goods"?

That's where that whole argument against intervention falls apart. The free market needs judicious pushes in the right direction to optimize public benefit

Give me an example of something that can only function when run by the public sector. The only two examples that I can really think of are national defence and law enforcement. Even in these sectors, private sector can cover a wide array of services. The US military, for example, continuously turn to private contractors to handle catering, hospitality, etc.

Not necessarily outright run by the public sector, but funded by them. Let's take the argument for emerging industries for instance:

X-Corp in Canada is the only producer of regional jet planes of consequence. Y-Corp in Brazil seeks to enter the industry, but the infrastructure for this industry in Brazil is not there, and there is no free-market reason for the infrastructure to be there. If Y-Corp forces its way into the industry anyway, supply will rise, demand will go down, and prices will go down, meaning that the market has been harmed for both players by Y-Corp's entry in the short run, as prices still go down for regional jets altogether, and Y-Corp isn't getting much money.

Brazil chooses to subsidize Y-Corp, and now while prices have been forced down across the board, Y-Corp is making money while X-Corp has to eat the lowered prices due to higher supply. Since there is now a financial incentive for Y-Corp to continue working in this industry, it begins to build infrastructure, bringing a network of jobs in related fields to Brazil and expanding opportunities for other Brazilian companies (what we might call a semi-public good, purely business in concern but benefitting more than just Y-Corp). Ideally, of course, Y-Corp can eventually be weaned off subsidies and compete in an industry that is now viable on its own

A business that is out-and-out state-run could fill in for a business receiving subsidies in this scenario, but in either case, the market needs a push in the right direction. Obviously it cannot be undertaken recklessly, but the payoffs are there