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May 29, 2012

"The Lousy Anti-Virus Market Is Proof The Deregulation Doesn't Work"

Even leaving aside the title--which begs the question of how, exactly, regulation would have prevented the author's problem but which the author probably didn't write--this is one of the dopiest market failure arguments I have ever seen. (And, trust me, I've seen a lot.)

The author "had to take my computer in to an expert" because it was infected with malware despite his installation of anti-virus and anti-malware programs recommended "just a few years ago" by PC magazine and CNET users and others. He fears "that in a couple of years, I should go through the process of investigating anti-virus and anti-malware software again" and concludes:

. . . the outcome of this market is not one most of us would consider efficient. 

And yet, the market seems to be characterized by most of the factors that a libertarian or conservative economist look for to produce an optimal outcome. It is relatively easy and inexpensive to enter and exit the market for anti-bad things software, the market is literally global (you can buy software made anywhere and download it from your desk in minutes), the cost of such products is low (many are given away free), there's a heck of a lot of information out there, and there's virtually no government involvement in the process. 

So why are the outcomes of this market so poor?

Three points:

1. If the author buys a new car and finds he has to change the oil a couple of times a year is the auto market inefficient?

2. But wait . . . how did the malware get into his computer in the first place? A better analogy is this: if the author drives his car recklessly--too fast--down a dimly lit street and hits a pedestrian, is the auto market inefficient?

3. From what I understand, typewriters and HP calculators and the US mail are not subject to malware. The author can switch anytime he wants. 

I recommend to the author readings on the "Nirvana Fallacy". Original here; short summary here

Comments

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Speedmaster

>> "The Lousy Anti-Virus Market Is Proof The Deregulation Doesn't Work"

That is a legendary non-sequitur. ;-)

JorgXMcKie

I'm saving this one for my students as an example of specious reasoning.

And now I remember why I quit reading the angrybear blog.

Ted Craig

His real problem is markets do work - that's why malware protection needs so many updates.

Ken

One of the commenters did suggest stiffer penalties for hackers. I agree. Here's a little economics on executing hackers:

http://www.slate.com/articles/arts/everyday_economics/2004/05/feed_the_worms_who_write_worms_to_the_worms.html

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