Lecture I: Property, contract, and the theory of exchange
LECTURE I Property, contract, and the theory of exchange The English economists have taken the laws of private property for granted, assuming that they are ﬁxed and immutable in the nature of things, and therefore needed no investigation. But such laws are changeable – they diﬀer for diﬀerent peoples and places, and they have profound inﬂuence upon the production and distribution of wealth. John Commons (1893 , p. 59) Wealth, in a commercial age, is made up largely of promises. Roscoe Pound (1922 , p. 133) ECONOMICS AND THE “THEORY OF THE MARKET” While some changes have been evident over the last several decades, the above observation by John Commons remains largely accurate. Typically, and naively, most economists adhere to Jean Baptiste Say’s dictum: “Political Economy recognizes the right of property solely as the most powerful of all encouragements to the multiplication of wealth, and is satisﬁed with its actual stability, without inquiring about its origins or its safeguards” (Say, as quoted in Ely, 1914, p. 63). To Say and most economists after him, property rights are a ﬁxed and unproblematic set of laws or rules. This failure is exacerbated by textbook presentations of market relations that take the deﬁnition and meaning of a “commodity” to be given and self-evident. This lack of concern for speciﬁcs is aggravated when an abstract good, by tradition termed a “widget,” is used to illustrate the “essence” of the market process. In this pedagogy, the student’s attention is then...
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