According to Karl Polanyi, a market is a meeting place for the purpose of exchange and transaction (Polanyi 1957, 56). The prompt states that a standard view of market holds that most or all values are external to the logic of self-interested, mutually beneficial exchange. Karl Polanyi and Friedrich Hayek analyze this view of market in their writings and evaluate it according to their own beliefs. Hayek seems to agree with the standard view. He believes that values like the concern for justice or the minimizing of people suffering are not embedded in the market, but are external from it. He supports this view by introducing the concept of what he calls “catallaxy.” Polanyi, however, takes an opposing view to externalized values by saying that values are, in fact, embedded in the market. He presents an overview of how history supports this view. In order to better explain his beliefs, Hayek first presents a problem. This problem is that society has a common misconception of there being a single economy with a unified hierarchy of ends determined by that economy (Hayek 1976, 108). This implies that markets within the economy have a single end in the context of that unified hierarchy. This view, however, is in error because markets, in actuality, serve not one end, but the interests of all members in the market (Hayek 1976, 108). In order to compensate for the misconception and assumed meaning of “economy,” Hayek developed a new term, “catallaxy.” Catallaxy is a concept that describes numerous interrelated economies rather than just one whole. “It is the special kind of spontaneous order produced by the market through people acting within the rules of law of property, tort, and contract (Hayek 1976, 109). This is what makes up the... ... middle of paper ... ...the land enclosures, which increases the value and productivity of the land, everyone benefitted. What seemed like a bad thing without values, turned out to overall be a good thing with values present (Polanyi 1957, 33). This embodies Polanyi’s idea that, unlike what Hayek thinks, regulation is a good thing for economic growth if it safeguards the welfare of the community (Polanyi 1957, 33). In conclusion, Hayek favors the standard view of markets with the idea that regulation is bad, while Polanyi favors the view that values are internal and regulation can be a good thing to ensure market growth. Works Cited Hayek, Friedrich A. Von. Law, Legislation and Liberty ... Vol. 2. London: n.p., 1976. UCR Libraries Scotty Catalog. Web. 17 Apr. 2014. Polanyi, Karl. The Great Transformation. Boston: Beacon, 1957. UCR Libraries Scotty Catalog. Web. 17 Apr. 2014.
With the collapse of communism in Eastern Europe at the time, some economic consultants had considered Hayek’s currency system as a replacement for fixed-rate currencies. Even at the age of 89, Hayek was still publishing. In his book The Fatal Conceit, he laid out some profound insights to explain the intellectual’s attraction to socialism and then chose to refute the basis for their beliefs.
Feinberg, J. “ The Nature and Value of Rights.” Journal of Value Inquiry 4(1970): 243
Diamond discusses the importance of ideology and the ways in which they “pave road” for society to appropriately organize upon. Diamond specifically outlines the ways in which changing an ideology can alter society in Chapter 14, From Egalitarianism to Kleptocracy, as society evolves through the spread of an ideology. Both Diamond and Hunt agree about the importance of ideology in society, but their standpoints are critically different in their perspectives. Diamond focuses on other aspects just as well, such as immunity to germs or resource production, whereas Hunt specifically focuses on the ways in which changes in ideology impact the development of capitalism. Thus, both Hunt and Diamond have different thought’s on economic history, but converge in the ideal of signifying ideological
David Dyzenhaus and Arthur Ripstein, eds. Law and Morality: Readings in Legal Philosophy. (University of Toronto Press, 1996).
—. The Spirit of the Laws. Ed. J.V. Prichard. Trans. Thomas Nugent. London: Bell & Sons, Ltd., 1914.
Bauman, Z, (1988) cited in Hetherington K, and Harvard C.(eds) (2014, pg.126,142). He further claims, “This is the characteristic pattern of inequality in our contemporary consumer society one that contrasts with the lines of class and occupational status that characterised the major cleavages in Industrial society”. Bauman, Z, (1988) cited in Alan, J. (2014 pg. 275). Moreover, consumerism encourages people to consume creating their own identities, replacing Identities centred on production and work. Furthermore, Hayek in the ‘Ordering Lives Strand’ claims “The market should be free of political intervention allowing individuals to be free to pursue their own interests” Hayek, F.A. (1976). cited in Clarke, J. (2014 pg.380). However, Allen. claims “The ability to ‘buy into’ a particular lifestyle actively excludes others from it on the basis of lack of income and those unable to do so will be seen as unworthy or inadequate” (Allen, J. 2014 P. 278). Thus constraints can be seen placed on people through lack of income, turning differences into inequalities with evidence indicating that ‘People’s values, beliefs and status are now shaped by ‘Consuming’ rather than as in Industrial times by work, politics and religion’, (The Open University, 2016). Therefore, differences which turn into inequalities are as predominant in today’s consumer society as they were in our industrial
Debra Satz, in “Why Some Things Should Not Be for Sale”, argues for a more complex approach in market regulation, as some markets are more problematic than others. While economists tend to evaluate exchanges based only on proficiency (Satz 2010, p2), Satz considers the social context of individual practices in market relationships. In Staz proposed theory, there are four parameters of a market that can make it “noxious”. Noxious in this case meaning the effect of the market causes harmful consequences on society or persons involved. First, some markets may be reliant on the vulnerability of one party to trade. Second, some markets may have exceedingly bad consequences, in terms of welfare or status, for persons involved. Third, some markets may be one-sidedness because of insufficient information, knowledge, or ability to understand or forecast the consequences of an arrangement. Fourth, some markets may have bad consequences for society at large when they reinforce discrimination or inequality of status. For example markets that are considered noxious due to one or more parameters being present in their sale are child labor, prostitution and kidney exchange.
(7) H. L., Hart, The Concept of Law, ch. VIII, and D., Lyons, Ethics and the rule of law, Cambridge University Press, 1989, p. 78 ff,
The two crucial and connected points, to which Sunstein returns again and again, are that markets are complex institutions and that morals are an irreducible element of social and political life. It is not exactly that there is no such thing as a free market or that morals are everywhere, but that free markets cannot be understood in isolation from beliefs and practices, especially beliefs about what is just and good for human beings and practices that prepare or prevent one from participating effectively in commercial, democratic society. Moreover, because they depend on and are partly constituted by law, free markets are not only more complex but also less autonomous than they sometimes appear. For example, the law of property provides rules of entitlement and the law of contract establishes rules of transfer.
Hayek properly lays out the foundation to support his reasoning for supporting capitalism. He points out that capitalism cannot succeed without a proper legal framework. With legal laws and enforcement in force, classical liberalism believes that capitalism and its forces of competition will coordinate human efforts best rather than relying on a total laissez fare policy (Hayek 41). Other factors needed for capitalism to succeed are the organization of ¡§money, markets, and channels of information¡¨ (43). Those three factors are the basis for competition which is most effective in determining allocation of resources and generating the maximum amount of marginal utility. When prices and/or output are controlled, the central planners are interfering with free markets which distort the true view of the marketplace.
Sueur AL, Sunkin M and Murkens J, Public Law: Text, Cases, and Materials 2e (Oxford University Press 2013)
- The free market economic theory provides the rationale for the managerial responsibility to make as much money for their stockholders as possible. The justification of the free market is based on the utilitarian ethical principle that one should act so as to maximize the overall good. Therefore, the overall good in terms of the economic model is that of the stockholders.
Smith's formulation transcends a purely descriptive account of the transformations that shook eighteenth-century Europe. A powerful normative theory about the emancipatory character of market systems lies at the heart of Wealth of Nations. These markets constitute "the system of natural liberty" because they shatter traditional hierarchies, exclusions, and privileges.2 Unlike mercantilism and other alternative mechanisms of economic coordination, markets are based on the spontaneous and free expression of individual preferences. Rather than change, even repress, human nature to accord with an abstract bundle of values, market economies accept the propensities of humankind and are attentive to their character. They recognize and value its inclinations; not only human reason but the full panoply of individual aspirations and needs.3 Thus, for Smith, markets give full expression to individual, economic liberty.
Today, more than ever, there is great debate over politics and which economic system works the best. How needs and wants should be allocated, and who should do the allocating, is one of the most highly debated topics in our current society. Be it communist dictators defending a command economy, free market conservatives defending a market economy, or European liberals defending socialism, everyone has an opinion. While all systems have flaws and merits, it must be decided which system is the best for all citizens. When looking at the financial well being of all citizens, it is clear that market economies fall short on ensuring that the basic needs of all citizens are met.
Simmons, A. John (1992). The Lockean Theory of Rights. Princeton, New Jersey: Princeton University Press. 127.