Morality & the Free Market - Intro to Political Economy, Lecture10

https://sites.duke.edu/intrope/

COURSE OVERVIEW:
Introduction to Political Economy is a self-contained and nontechnical overview of the intellectual history of political economy, the logic of microeconomics, and the definitions used in macroeconomics. It introduces the notion of a political economy, emphasizing the moral and ethical problems that markets solve, and fail to solve.

LECTURE OVERVIEW:
1. A core argument for markets, then, is that voluntary exchange makes both parties better off. The public policy implication is that the state should take only minimal actions to regulate voluntary exchange, and those actions should foster such exchanges by reducing transactions costs.
2. Greek philosophy and market connections: Xenophon and Aristotle
3. Six conditions for an exchange to be "eunvoluntary"
-- Conventional ownership by both parties
-- Conventional capacity to transfer and assign this ownership to the other party
-- The absence of post-exchange regret, for both parties, in the sense that both receive value at least as great as was anticipated at the time of the agreement to exchange
-- The absence of uncompensated externalities
-- Neither party is coerced, in the sense of being forced to exchange by threat
-- Neither party is coerced in the alternative sense of being harmed by failing to exchange.
4. Bottom line: Just because an exchange is not coerced by human Agency, it does not follow that it is “Voluntary”. And if the exchange is not voluntary, then we have to question the whole set of conclusions about markets being ethical and beneficial. Essentially comes down to many buyers and many sellers. But that’s interesting, because it is exactly the definition of “Perfect competition”. So, assumption of perfect Competition finesses concerns about ethics of Markets. In short, there Is a Reason why economists and philosophers tend to use different examples!

READINGS:
Aristotle, Nichomachean Ethics, Books III and V, (http://classics.mit.edu/Aristotle/nic... )
Video: Sandel—Justice and Virtue (   • Justice: What's The Right Thing To Do...  )

Subscribe to our YouTube Channel for more!
Follow us at   / dukepolisci  
Like us at   / dukepolisci  
Follow us at   / dukepolisci  

Produced by Shaun King, Duke University Department of Political Science Multimedia Specialist