ABSTRACT
The price mechanism seems to offer a simple yet effective system of allocating resources by its clear signalling of consumer demands to producers. It is often contrasted with systems of state planning – particularly as practised in former communist Eastern Europe. However, critical analysis of the market mechanism raises issues of concern. The rise of neoliberalism has promoted more competition and less regulation of markets. But can deregulation go too far? Could the Boeing 737Max air disasters have been avoided if safety regulation had been tighter? The market produces cheap high sugar fizzy drinks, but consumption of these is a major cause of ill-health and obesity. What should we do about this? Fitness clubs and gyms lead to healthier lifestyles but are expensive to join. Should we subsidize them? Governments subsidize high culture activities such as opera and ballet but allow the free market to set football ticket prices. This chapter examines whether leisure and tourism provision should be left to the free market, and considers reasons for, and forms of, market intervention. This chapter enables the reader to:
evaluate the benefits of the free market
evaluate the problems of the free market
understand the methods of market intervention
justify market intervention
understand recent developments in public sector provision.
