The problem is that wealth redistribution policies have irresistible appeal, and no regulatory system that is freedom-oriented adequately addresses the aspect of luck that impacts one's lot in life.
For instance, if the initial population of such a country all sat down together and agreed on what level of social support they would want if they happened to be born with below-average IQ, having some severe physical disability, being suddenly unable to work, having a special needs child whose care cost more than their own annual wages, etc., then the rules of the game could be set up in a sustainable way so that generation after generation there would not be the same sort of market for social entrepreneurship intended merely to achieve after-the-fact wealth redistribution, since a fair system would have been baked in from the start.
I don't think this is so much a classic market failure as it is a failure of human brains to perform counter-factual reasoning.
Also, values change over time. What is viewed as a fair system now might be viewed very differently in a 50 or 100 years, all else being equal.
For instance, if the initial population of such a country all sat down together and agreed on what level of social support they would want if they happened to be born with below-average IQ, having some severe physical disability, being suddenly unable to work, having a special needs child whose care cost more than their own annual wages, etc., then the rules of the game could be set up in a sustainable way so that generation after generation there would not be the same sort of market for social entrepreneurship intended merely to achieve after-the-fact wealth redistribution, since a fair system would have been baked in from the start.
I don't think this is so much a classic market failure as it is a failure of human brains to perform counter-factual reasoning.
Also, values change over time. What is viewed as a fair system now might be viewed very differently in a 50 or 100 years, all else being equal.