I'd like to see an economist's view on how the free market is failing here, and what we can do about it.
His idea was: buyers don’t know if a car is good and the risk of getting “a lemon” (a bad car) reduces how much they’re willing to pay. That means sellers reduce the quality of what they’re selling or leave the market. After a while the quality degrades so much that buyers notice and want to pay even less. Eventually the market is 100% lemons.
The paper was controversial when it was published in the 1970s, but helped kick start research into “information asymmetry” and the potential for market failure.
In other news a car has infinute milage on a frictionless surface in a vacuum
As far as what you can do about it, you could start with preventing those people from interacting with markets. I leave the mechanism as an exercise for the reader.
What we are doing is the equivalent of looking at a warped mirror e.g. a non free market and declaring that the reflections are not distorted e.g. a free market.
A lot of people are scared of living on the streets or feel shame from living off welfare. There is no way these people are going to make long term decisions if their short term needs haven't been met or there is a constant risk that they won't be met tomorrow.
This is actually one of the more disgusting parts of Austrian economics. Where a low time preference is basically considered the equivalent of a high IQ. If you have a high time preference you must be some dumb consumerist animal, when the truth is that you barely earn enough money to meet your living expenses which means 100% of your spending must go to consumption. Thirst is more urgent than hunger which is more urgent than shelter which is more urgent than social needs and so on. At some point you are not longer hungry or homeless. The urgency is gone. It would be more accurate to say that time preference is a function of wealth and having your needs met, rather than some intellectual jerk off competition where stupid people are filtered out and smart people end up with all the wealth.
I honestly just see a regular capitalistic market, where a company is trying to make money at the expense of other companies. By that I don't mean Amazon is outcompeting retailers and pushing them out the market. I mean Amazon is actively causing damage to well known brands by letting scammers sell those branded products to promote their own AmazonBasics brand which is free of scammers.
Even if the scams are unintended, there is no profit incentive to get rid of them.