Government intervention is necessary in certain cases from "summary" of Economic Analysis of Law by Richard A. Posner
In a market economy, government intervention is often deemed necessary in certain cases. This is because markets are not always efficient or equitable on their own. One reason for government intervention is the existence of externalities. Externalities refer to the impact of an economic activity on parties who did not choose to be involved in that activity. For example, pollution from a factory affects the health of nearby residents, even though they are not directly involved in the production process. In such cases, government intervention is necessary to internalize the external costs and ensure that the market outcome is efficient.
Another reason for government intervention is the presence of public goods. Public goods are goods that are non-excludable and non-rivalrous, meaning that individuals cannot be excluded from consuming them, and one person's consumption does not reduce the amount...
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