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ABC
25
July 2012
Is the ‘free market’ a moral entity? One
of Australia’s best known free-market economists, Ian Harper, rethinks some
of his views, in not so much a conversion but a revision on the road to
Damascus.
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While Prof Harper makes several good
points, the common use of the term "free market" is unfortunate and
potentially counter-productive. The term "free market" is such a
semantic imbroglio ad contradictionem that it is best expunged from dialectic
vocabulary. While a Pareto efficient "free market" is free from state
constraints on supply and demand, this should not be confused with freedom from
regulation in general; on the contrary, a Pareto efficient market actually
depends upon regulation to enforce Walrasian market conditions and correct for
externalities. While "the market", as a construct, is amoral by
definition, the reality that it models is shaped by our choices in economic
policy, wherein lies our ethical imperative.
(via ST’s wall)
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