Table of Contents

Handbook of Economics and Ethics

Handbook of Economics and Ethics

Elgar original reference

Edited by Jan Peil and Irene van Staveren

The Handbook of Economics and Ethics portrays an understanding of economic methodology in which facts and values, though distinct, are closely interconnected in a variety of ways. From theory building to data collection, and from modelling to policy evaluation, this encyclopaedic Handbook is at the intersection of economics and ethics.

Chapter 42: Market

John O’Neill

Subjects: economics and finance, behavioural and experimental economics, history of economic thought

Extract

John O’Neill Markets and ethics In a market economy goods are produced for, distributed by and subject to contractual forms of exchange in which money and property rights are transferred between agents (O’Neill 1998, Ch. 1). Decisions about the production and distribution of goods are made by agents responding independently to changing relative prices of different goods. The resulting pattern of production and distribution is generally viewed as an unintended consequence of those individual responses. As such, it has long been subject to a particular form of ethical criticism. Patterns of production and distribution are not the result of any individually or socially determined ethical ends. In that sense, market economies are ethically disembedded economies (Polanyi 1957) and seem to face special problems concerning their ethical justifiability. Exchange relations are entered into not with the aim of realizing some good, but to accumulate further means of exchange. This critical line of argument can be traced back to Aristotle’s distinction between the form of acquisition characteristic of the household and polis in which goods are produced and acquired directly to meet some human need, and forms of chrematistic acquisition characteristic of the market which aim at the accumulation of the means of exchange. The first form of acquisition has limits given by the needs it satisfies; the second knows no limits (Aristotle 1948, Book 1, Chs 8–9). Aristotle’s influence is apparent in Marx (1970, Ch. 4) and in Polanyi (1957, pp. 53–4). The critic’s argument could be stated in...

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