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The Rise of the Market

Critical Essays on the Political Economy of Neo-Liberalism

Edited by Philip Arestis and Malcolm Sawyer

The growth of neo-liberalism has been the dominant political force in the past two decades. This volume concentrates on understanding the political economy of neo-liberalism. It focuses on a number of the most critical issues and examines the essence of neo-liberalism, namely, the dominance of the market.
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Chapter 2: Social norms and endogenous preferences: the political economy of market expansion

Euclid Tsakalotos


Euclid Tsakalotos* 1. INTRODUCTION Over the last twenty years, or so, sceptics of the market have been on the defensive. Whether the issue has been the international liberalization of capital controls or the introduction of ‘quasi markets’ in the public sector, the argument has been that markets will bring about significant efficiency gains. In terms of neoclassical economics, and liberal political theory, this gain can be understood in terms of an increased satisfaction of people’s preferences and an enhanced ability of individuals to carry out whatever their own conception of the ‘good’ happens to be. Whether this has been the result of the increased scope of the market has, of course, not gone unchallenged. But for the purposes of this chapter I am not so much concerned with what the scope of the market should be in any particular area, but with what kinds of argument should carry weight in any discussion about the scope of the market. I want to argue that, in most cases for both proponents and opponents of an expansion of the scope of the market, there are important ethical and political economy issues that need to be engaged with and which are all too often ignored. More specifically, I am interested in confronting a form of argument – which I find that critics of the market all too often have considerable problems responding to – that runs roughly as follows: we can expand the market, or market-type processes, for reasons of efficiency and...

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