Market intervention

Among other methods, this could be achieved by purchasing the marketed product, such as the case of a jobs guarantee that ensures the utilisation of labour.

However, it has been observed as long ago as the 14th century that taxation can influence trade and suppress economic activity.

[3] In practice, this is sometimes seen as a desirable outcome, and taxes are levied with the intention of stymieing or limiting a market.

Economist Arthur Pigou used the concept of externalities developed by Alfred Marshall to suggest that taxes and subsidies should be used to internalise costs that are not fully captured by existing market structures.

Together, these form what are referred to as transaction costs, a concept developed among others by American John Commons and further by English economist Ronald Coase.