I'm a market guy like you guys, so I'm inclind to say "isn't this good, it's the efficient allocation?" I don't see any obvious market failure and you don't point one out.The market is providing an incentive to be an engineer, but it's so hard people still don't wnat to do it. The market isn't providing much incentive to become a lawyer, but people still do it because it's easy.We even distort the market to favor studying engineering (more scholarships, more subsidies for the education) and people still don't want to study it.
Steve, I think there are a couple of things that will skew the market outcome away from the optimal.1) Many of the transactions involving lawyers are not voluntary. If you can convince a jury to give you someone elses's money, that's not really a market outcome.2) Law schools withhold and suppress the information that applicants need to make informed decisions. Read this http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1497044## and compare it with the conventional wisdom that everyone hears all the time, and it's no surprise that we get lots of this http://temporaryattorney.blogspot.com/
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