To understand the failure of both the free market and the US political system one need only look at the fishing industry.
Everyone agrees that that the Maine cod fishery has been severely over-fished and is on the brink of total collapse. The logical policy would be to call a halt to all fishing of cod until the the stocks have returned to a sustainable level. Instead the administration proposes the highest quota that can be plausibly be described as sustainable, the industry protests the proposed cuts as 'devastating', the overfishing continues and a few years later the sustainable catch is lower still.
Here is how the New York Times reports the proposed cuts:
“It’s going to be hard to preserve the industry at those low numbers, and that’s something that concerns us a great deal,” said Sam Rauch, the head of the National Oceanic and Atmospheric Administration’s fisheries arm, who led the meeting of fishermen, scientists and regulators.However hard it might be to preserve the industry with lower quotas it is going to be a lot harder to preserve the industry by fishing cod to extinction like the dodo and the passenger pigeon.
It is the same depressing story in the EU. As George Monblot puts it in the Guardian:
Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a year, after which no one will ever eat fish again.Privatization is frequently mooted as the solution to 'government' failure. As if converting the common fishing grounds into private property by government decree was not a government intervention. It might work, but experience in Iceland suggests not.