Takeaways: •Free riders - people who benefit without paying •Public good - anything having the characteristics of non-exclusion and non-rivalry - Non-exclusion - the idea that you can’t exclude ppl who don’t pay •Tragedy of the commons - the idea that common goods that everyone has access to are often misused or exploited. It explains most of environmental problems •Externalities - situations when there’s an external cost or benefit that accrue to other people or society as a whole. - Negative externality ex: polluted river - Positive externality ex: education •Regulatory policies - rules established by government decree •Market based policies - policies designed to manipulate markets, prices and incentives to correct market failures. Ex: taxes and subsidies

"...or a satisfying ending to game of thrones" Yeah, too many free riders...

She predicted the unsatisfying end to Game of Thrones ......wow

"The question isn't 'which is better, free markets or government', the question is 'how can they work together to make our lives better.'" I wish more people looked at it this way.

This 10-minute video is much better than my school's 2 hour lecture

holy bejesus! they predicted the ending of game of thrones !!!!

There are two things certain in life: death and awesome thought bubble animations

Politicians, Republican & Democrats alike, should watch these videos. Like if you agree ^.^

Essentially, it's the Prisoner's Dilemma with 7 billion participants and the outcome for non-cooperation is a sliding spectrum of bad consequences brought to you by the Four Horsemen (pestilence, war, famine, and ultimately death).

I love you guys!! You're doing a great job!! You're making us aware of a lot of stuff that we think are just boring and not important! P.s. I've never been so intrested in economics and I'm studying economy since 2011 Thank you!

Love this episode - Clearly shows how economics can be applied to improving our society, especially from the environmental aspect which is something I am particularly interested in. And i am sure other episodes would appeal to other viewers with different interests too~

I have an economics exam next week and I'm watching this entire series as revision, thanks guys it's really helping :)

Thank you Jacob, Adrian, John, Hank for providing free education and being such great teachers! I hope Crash Course will discreetly help shape our future (a better one of course) where people are educated and life on earth is better!

I'm thankful for the Crash Course people. Teaching me what my teachers should have taught me instead of ignoring all of my questions. ☺️

This video is a great primer for those who are convinced anarchocapitalism works well, and even for libertarians.

Thank you so much for the information. Very impressive. One of the mains reasons for government involvement in the marketplace is that free markets do not always result in the socially efficient quantities of goods at socially efficient prices. On the other hand, before, I was really disappointed whenever I received my monthly salary less taxes but now I realized taxes helps us a lot and it discourages individual or firms behavior.

Well Game of Thrones had an unsatisfactory ending.

thank you guys for making these, i can wrap my head around the topic in your 10 min video when i cant in a 2 hr university lecture

I love that this was published so close to when my report on government policies and market failures will be due. Nice to see examples and well summarised.

Dannng it is amazing how these videos are so foreshadowing. Last video the gasoline shortage, now the unsatisfying end of game of thrones. Thank you so much for all the work that you do Crash Course 👏🏼

Literally watching this an hour before the final exam XD

It's fascinating to listen to the discussion of the Free Rider problem, and then hear a pitch for Patreon.

Man, I love this series. I regret not taking economics in university so this is filling in the gaps really well. Thanks Jacob and Adriene!!!! (I also figured some appreciation could cut through the grease of comment battles for you guys as well) (Thanks to the BTS team too!)

Interesting video, thanks for making economics enjoyable to watch :)

Reading the comments Every episode until now: You guys are awesome for explaining why free markets are the best. Today's episode: You guys don't know anything about free markets! Me: I shouldn't read comments.

this series single handedly predicted the coronavirus pandemic and the crappy GoT ending.

VERY insightful video with lots of great examples. Thank you Jacob and Adriene!!

Thanks for sharing in such an illustrative way. It's so much easier to understand things this way.

Become “More interesting to talk to at parties”, yup, that’s exactly why I’m obtaining my degrees

My microeconomics midterm is tomorrow and this helped more in 12 minutes than my professor has in weeks

@0:02 - Dope belt buckle, Jacob!

Thank you for that anecdote on the acid rain program - that is fascinating and positive news!

No one: Jacob: I'll talk about this abstract thing that most people won't be able to comprehend right away at the speed of bullets being shot out of a machine gun.

Could you please make a video about foreign exchange controls?

thanks guys! you're doing a great job! :)

Thank you so much for uploading this video and working so hard on it, it helped alot in the understanding of this concept ☺️☺️

You guys are calmer now, so I like you better.

Well I guess we brought this shitty end to game of thrones on ourselves

Thanks for the video! I had to use this video to make notes for homework!

Amazing video, very very good explanation of what causes market failure as well as incentive.

Wonderful explanation. Thank you.

The video proposes taxes and subsidies as an ideal market-based solution to promote government policy, but if you've watched their earlier video about deadweight loss, you would know that actually there is a real, social cost towards taxation due to the decrease in business it causes. So if anything, taxation has a negative externality of decreasing social well-being by stifling the market and making everybody else in the economy less well-off. But don't despair! This video didn't mention this, but Nobel Prize-winning economist Ronald Coase came up with a solution where the free market can regulate externalities called the Coase Theorem. A good example is with carbon credits (not the same thing as cap-and-trade). By turning carbon emissions into tradeable, priceable goods, markets can be created where these costs can be negated without the deadweight loss of taxation. There are companies that now plant trees to gain credits that they then sell to coal power plants and other polluters. No taxes, no government intervention, no problem.

Best video in this series so far - well done folks

Love this video! Great crash course!!

haha we didnt get a satisfying ending to game of thrones anyways XD

The situation with the students was an example of market failure, but that's because market failure applies to group action and not just product markets. Since governments are also groups of people, they can fail to create rational laws, resulting in harm. Governments also only solve the problems of externalities and monopolies by establishing a larger monopoly (itself) and externalizing potentially more costs onto the population (taxation and regulatory overhead).

really informative, thanks a lot!

well ilustrated! thanks for your help!

*glances at comment section*....why did I think it was a good idea to look in here again?

So is building the largest military in the world a negative or positive externality? & what is the effect on the environment when building & using thousands of tanks, drones, helicopters, fighter planes, ships, bombs, & military bases?

Great topic, great explanation, great video

the greatest channel ever ❤ love u mr &mrs bubles😂❤

So... this video fits the definition of a public good. But it's not provided by the government, it's crowdfunded on patreon... Interesting. I qualify as a free rider, because I never click ads (personally I think they're unethical) and patreon doesn't take bitcoin. Maybe doing a video about nonprofit organizations would be interesting. Wikipedia really stands out as a topic for me.

Do the thumbnails for these videos say "Don't Forget to Be Awesome" in Latin? (Look on the arch in the middle of the dollar.)

Thanks for explaining externality for my igcse exam tmr!

Thank you, sir. what are the effects of market failure on prices, efficiency of market operation and economic welfare?

"Sometimes"

"... sometimes markets get it wrong...." Oh. You noticed.

it is rare to get both sides of the coin on youtube, this is something I value a lot of crash course

When it comes to private and public schools, if there were only private schools then pricing would drop because of the increased competition. There would be some schools that are like McDonalds - low cost, low quality, and others like high-end restaurants - High cost, high quality. So long as all the schools reach certain standards of education, then it would all work out for the most part.

Did you ever hear the Tragedy of the commons? I thought not. It's not a story the industrialists would tell you...

Very helpful thank you.. some teachers need to watch more YT, they need some improvement in their teaching skills!! JUST SAYING

This presentation encouraging me to shift to economic fields

nice video - easy to understand , grt examples

Crash Course Economics missed an opportunity to acknowledge 'gentrification' is a form of market failure.

Covid 19 is also an example of market failure 😂😂

2:00 Trust me it wasn't the pirates that made got's ending suck. Lol you guys are great.

omg my two favs in one vid

You can't say nobody is perfect. I'm perfect. My mom said so!

yet it's the same subsidies that go into education that lead to the increase in the cost of tuition...some of these examples are too overoptimistic and the criticism against regulations are misleading too.

Thank you. Well done.

This is the best video of the serie ! Big thumb up !

This is the part of economics right wingers like to forget about.

I cant believe climate change's existence is still controversial in 2016

The crash course at cruising speed videos..had to watch at 0.9x :))

Great channel! Thanks :)

Too many people illegally downloaded GOT I guess....

We didn’t get a satisfying ending to Game of Thrones. Too many people illegally downloaded I guess.

thhis is amazingly informative

You completely omitted the exclusionary use of property rights to solve environmental problems.....

game of thrones references didn't age well

Who else likes that they use the thought bubble ITS HELPS SOOOOOO MUCH!

New episodes pls! can't get enough

Why is democracy any more likely to produce correct allocation of resources than the market? Are they not also subject to the exact same failures as markets? Possibly even to a greater extent.

Street lights and other infrastructure are important and should be paid for by those in the area. For instance, if a business wants people to be able to get to them, then they need to pay for the infrastructure around their location and simply add that to the cost of their good/service. There are also private roads, tolls, and plenty of other privatized options for paying for these things that would be far more efficient. America's infrastructure is currently crumbling. Give the responsibility to those who use the infrastructure and you have more accountability and more efficiency. Private companies already build pretty much all of it. Just cut out the middle-man called government. The tragedy of the commons is exactly why I don't want public goods/services. They are common goods that everyone has access to. They are often misused and exploited. There is plenty of corruption and waste in these things with little real accountability. Instead things like education should be in private hands where they are far less easily exploited and far more accountable to the consumer. This produces higher quality and lower prices for such goods/services through free market competition. Just keep the government out of it and let it be truly free. The tragedy of the commons is exactly why we should have less public things and more private things. People take care of things they own themselves, privately. If you own something as a collective, then you generally care less about its maintenance. With environmental issues, the solution is private property. If a business is harming your person/property (polluting the air you breath, your land, your water, etc.), then you should seek legal action against them. You should also boycott them and encourage others to do the same.

'Tragedy of the commons' sums up humanity very nicely.

Woah! AC/DC Econ is on here!! Moving up in the youtube food chain.

I've been watching since episode one, and Adriene Hill gets prettier and prettier

Betsy DeVos needs to watch this.

I m from IndiA , I love ur channel !

Loved this one ^_^

Also education is one of the biggest examples of government failures when it comes to trying to mandate a higher supply at the expense of high costs and poor quality.

I'd choose 6p with the goal that no one gets extra points... Yeah, I'm that kind of douche...

After seeing all Crash Course Economics videos, i came to this conclusion: for the free market to operate in nice terms and to common benefit, it depends a lot on ethical practices. I guess you could say this applies to everything, but since free markets is how most countries operates in the globalized world, it requires a special focus. I'm still somewhat cetic about free markets, as it's implemented, is the best system for trading and other related stuff.

A great, centralized video. Very minimal bias.

The free rider problem isn't a market failure, it's a collectivism problem. You get it with government, not with the market. Also fire, defense and education aren't a collective issue. People should be free to opt out as they see fit. No payment, no service. Further, the market isn't failing to provide them. The government took them over. Defense actually isn't non-excludable either. You can choose to not defend a patch of ground.

A video about how crowd sourcing doesn't work On a crowd sourced channel

Great for the IB! thnx

As always, it leaves lots of confusions to me.

The piracy example is bad, I wouldn't watch it if I couldn't get it for free. There is no loss for anyone. I've actually gotten several people to pay for it, so I'm actually helping them out.