The Market Economy: A Reader outlines the characteristics and philosophical underpinnings of the market economy and its usefulness in the allocation of resources. This anthology offers a comprehensive set of authentic, primary source selections that demonstrate how the tenets of classical economic liberalism provide the foundation for an efficient economic system--while also maximizing individual freedom. The readings also provide a structure for analyzing economic and philosophical issues. The book includes selections from several authors who are not (...) economists but whose work is important in terms of their contribution to economic thought, such as Henry David Throeau and Ayn Rand. It also features classic readings such as Adam Smith's invisible hand from his Wealth of Nations, David Ricardo's original explanation of comparative advantage from Principles of Political Economy and Taxation, and John Stuart Mill's eloquent expression of the limits of government in On Liberty. Latter day proponents of private enterprise include Friedrich Hayek, Ludwig von Mises, and Milton Friedman. These authors and others address how the market economy responds to such topical issues as the environment, income distribution, and free trade. (shrink)

This contribution offers an introduction to the Special Issue 'Rethinking the European Social Market Economy'. It places the Special Issue against the background of the debate on free markets versus social protection in the European Union and the inclusion of the notion of 'social market economy' in the Treaty on European Union. It sketches the meaning and development of the social market economy concept, and introduces the key questions underlying this Special Issue and the (...) contributions included in it. (shrink)

The Cold War has ended and the post-Cold War world is often presented as one in which democracy and market economies are victorious. Francis Fukuyama goes so far as to claim that democratic politics has triumphed on a global scale.[ii] At least from a statistical point of view, most nations now declare themselves to be democracies, and a majority of the global population lives in these countries.[iii] However, the claim that the West won the Cold War too easily occludes (...) recognition that the victory of democracy is restricted to the political sphere. While the dissolution of the Soviet Union has made the world “safe for democracy” in the political sphere, it has also made the world “safe for capitalism” in the economic sphere. In other words, the victory of democracy is partial since market economies remain largely undemocratic. (shrink)

Peter Sedgwick explores the relation of a theology of justice to that of human identity in the context of the market economy, and engages with critics of capitalism and the market. He examines three aspects of the market economy: first, how does it shape personal identity, through consumption and the experience of paid employment in relation to the work ethic? Second, what impact does the global economy have on local cultures? Finally, as manufacturing changes (...) out of all recognition through the impact of technology and global competition, what is the effect in terms of poverty? Drawing on the response of the Catholic Church, both in the United States and in papal encyclicals, to the market economy from 1985–1991, Sedgwick argues that its involvement deserves to be better known. Moreover, he recommends that the Churches remain part of the debate in reforming and humanizing the market economy. (shrink)

Although the governmentality literature has occasionally acknowledged the importance of the concept of a liberal truth-regime, there has never been a thorough investi-gation of the role it plays in Foucault’s governmentality lectures. Therefore, this paper begins with an examination of the lectures’ “archaeological dimension” that leads to two claims: First, it shows that the crucial conceptual tool in the lectures is the question about the relation to truth that a particular political rationality possesses. Only by looking at the changing truth-regimes (...) of the liberal governmentalities will their differences and continuities come into full contrast. The article’s second claim is that this conceptually sharpened understanding of the political rationalities is required for a diagnosis of the present, which reveals that today’s dominant governmentality is no longer neo-liberalism but a new liberal rationality: neosocial market economy. (shrink)

Should perfectionist ideals of meaningful work play a significant part in the design of economic systems? In an influential article (Meaningful Work and Market Socialism), Richard Arneson rejected this traditional socialist view. Instead, he maintained, it should be left to the market, as a system that is consistent with the principle of neutrality, to determine the extent to which such work is available, and socialists should restrict their normative concerns primarily to issues of distributive justice. Against this it (...) is argued here that market economies appear to be neutral only if understood in neo-classical, rather than institutionalist terms. From the latter perspective, market economies can be shown to take a number of institutionally distinct forms, which differ significantly in how far they favour the satisfaction of preferences for meaningful work. Collective choices between these alternative systems should take account of these differences, and the adoption of market economies does not avoid the need for perfectionist judgments in politics. (shrink)

The dominant understanding of political corporate social responsibility suggests new, broader political roles for businesses in the globalized economy, challenging the classical liberal social order. In this paper, we show how the major framing of the political CSR discussion not only challenges the classical liberal social order but also goes against the more general political economic perspective of the regulated market economy. We argue that this latter tendency of the political CSR discussion is its main weakness. We (...) introduce a Rawlsian reframing of political CSR that is in line with the idea of a global-regulated market economy and compatible with some of the basic global ethical aims of the political CSR movement. (shrink)

This article offers a synthesis of and conclusion to the contributions included in the Special Issue 'Rethinking the European Social Market Economy'. Based on different understandings of citizenship in the European Union and the roles of the EU and its member states in providing social protection arrangements, it develops a typology of four models of the EU's role in social protection. It then discusses the contributions to this Special Issue in light of this typology and draws a number (...) of overarching conclusions. (shrink)

At the heart of China's remarkable economic growth is a new economic system, which has emerged out of radical reforms in virtually all areas of economic activity. Understanding this system is the key to understanding the Chinese economy. This book, the culmination of many years of research in Hong Kong and China, is a comprehensive account of these systemic reforms, as well as of their transferability to other economies in transition. The starting-point of Dr Chai's analysis is a careful (...) examination of the structural elements of China's new economic system, focusing particularly on the decentralization of property rights in both the agricultural and industrial sectors. There follows a detailed analysis of changes in the functional elements of the system: its price and financial mechanisms. An assessment of the open-door policy also considers the twin impact of the liberalization of China's foreign trade and foreign investment regimes. Finally, China: Transition to a Market Economy highlights the increasingly important role of the non-state sector in facilitating economic growth and structural transformation. It will be essential reading for any student or researcher concerned with the Chinese economy, or with transition economies in general. (shrink)

This article introduces the special issue on “Relational Work in Market Economies” by explaining the origins of the concept and its value in illuminating a dimension of market activity that has not been systematically addressed by social scientists. It also explains why this focus on individual economic transactions could be relevant for those whose interest centers on broader questions of political economy. Finally, there are brief descriptions of the other six articles that make up this special issue.

This article seeks to subject Fred Block and Margaret Somers’ influential reconstruction of Karl Polanyi’s The Great Transformation to a systematic review. I show that Block & Somers’s central claim—that Polanyi’s thinking underwent a “theoretical shift” as he wrote his seminal book—is not supported by archival evidence. I demonstrate that all the narrative keys that Block & Somers advance to lend plausibility to their discovery of a “theory of the always-embedded market economy” in The Great Transformation, wither under (...) critical probing. While this article does not advance a comprehensive alternative reconstruction of Polanyi’s main work, the essential continuities it uncovers in his social thought suggest that Polanyi’s book is best understood as the culmination of his long-standing efforts to rebuild a radically transformative socialism on non-Marxist foundations. The recognition that Polanyi’s political purposes extend far beyond regulated capitalism or social-democracy, I conclude, makes it possible—and indeed necessary—to read The Great Transformation as an internally coherent work of social theory. (shrink)

The paper maps out an alternative to a behavioural (economic) approach to business ethics. Special attention is paid to the fundamental philosophical principle that any moral ‘ought’ implies a practical ‘can’, which the paper interprets with regard to the economic viability of moral agency of the firm under the conditions of the market economy, in particular competition. The paper details an economic understanding of business ethics with regard to classical and neo-classical views, on the one hand, and institutional, (...) libertarian thought, on the other hand. Implications are derived regarding unintentional and passive intentional moral agency of the firm. The paper moves on to suggest that moral agency can be economically viable in competitive ‘market’ interactions, which is conventionally disputed by classical/neo-classical and institutional, libertarian economics. The paper here conceptualises active moral agency of the firm as the utilisation of ethical capital in firm--stakeholder interactions. This yields a reinterpretation of instrumental stakeholder theory. (shrink)

The Civil Economy approach, as developed by Italian economists Luigino Bruni and Stefano Zamagni, aims at introducing reciprocity into the economy as a humanizing factor. Despite being presented as an innovative perspective, the CE approach shares many characteristics with the German model of Social Market Economy. The present paper compares both approaches, showing that they in fact share a normative basis and similar aims but address them from diverse points of view; namely, CE addresses them from (...) a virtue ethics perspective and SME from an institutional ethics one. This leads them to stress different aspects and to focus on diverse problems. Therefore, CE would not constitute an alternative to SME but a complement. Thus, a combination of both approaches should allow each to take advantage of their respective strengths and lead to a better result in terms of the common good. (shrink)

Over the last quarter-century, China has experienced dramatic changes associated with its development of a market economy. The character of clinical practice is also profoundly influenced by the ways in which reimbursement scales are established in public hospitals. The market distortions that lead to the over-prescription of drugs and the medically unindicated use of more expensive drugs and more costly high-technology diagnostic and therapeutic interventions create the most significant threat to patients. The payment of red packets represents (...) a black-market attempt to circumvent the non-market constraint on physicians' fees for services. These economic and practice pattern changes are taking place as China and many Pacific Rim societies are reconsidering the moral foundations of their professional ethics and their bioethics. The integrity of the medical profession and the trust of patients in physicians can only be restored and protected if the distorting forces of contemporary public policy are altered. (shrink)

The collapse of Communism in the regimes in Eastern Europe and the former Soviet Union has brought forth a plethora of alternative political and economic models for the reorganization of those societies. The vacuum that has been left could be regarded as an ideal laboratory for the testing of competing theories, and the temptations to experiment with the more benign forms of constructivist rationalism are likely to prove irresistible. If liberal capitalism is to be successfully created, it will clearly not (...) have the same biography as it has had in the Western European and Anglo-American countries, where its emergence was the result of slow evolution: often its appearance and survival were due to a quite fortuitous combination of circumstances. In those countries it was not the result of any deliberate democratic choice but the outcome of a happy confluence of traditional rules and customary practices, and the participants in them had little idea of the form of the system that they were creating. Indeed, ideological sanctification was almost an afterthought, and democratic approval was belated and in most cases not enthusiastic. Britain was a liberal capitalist society, and possessed the necessary body of private law, some time before the franchise was significantly democratized . It is, of course, recent theoretical and empirical research which has revealed that the political choice mechanisms that developed haphazardly after the success of the market are a potential threat to it. (shrink)

Plastic consumption is an important aspect of contemporary living, and studies that systematically examine consumers’ plastic waste recycling intentions from an ethical perspective are scarce. Considering the severity of plastic waste recycling problems globally based on the stimulus-organism-response paradigm, this study analyses how the information publicity influences consumers’ plastic waste recycling intentions from an ethical perspective in an emerging market economy. We investigate this link by focusing on the indirect effect of perceived social pressure and the moderating role (...) of media disposition (i.e., media richness and content trustworthiness). Data from a three-wave field survey of 469 household consumers from China showed that social pressure mediated the positive relationship between information publicity and ethical recycling intentions. Additionally, media richness and content trustworthiness moderate the link between information publicity and consumers’ perceptions of social pressure. These findings provide encouraging evidence for applying the SOR paradigm to explain the ethical recycling intention of consumers. The findings may assist policymakers in motivating consumers to think ethically about plastic waste recycling. (shrink)

It is widely known that Hegel is a proponent and defender of the market economy. But why exactly does Hegel think that the market economy is superior to other economic systems? In this paper, I argue that Hegel's answer to this question has not been sufficiently understood. Commentators, or so I want to claim, have only identified one part of Hegel's argument—but have left out the most original and surprising dimension of his view: namely, Hegel's conviction (...) that we should embrace the market economy for its educational impact. Indeed, Hegel thinks that the market, by creating a sphere of life apart from traditional norms and expectations, teaches us something about ourselves, about others, and about the world we inhabit together—something that we could not learn anywhere else, but that we inevitably need to live well as individuals. (shrink)

This book explains the transitions in twentieth-century industrial leadership from Britain to the United States and, most recently, to Japan, in terms of the changing business investment strategies and organizational structures in these nations. The author criticizes economists for failing to understand these historical changes. The book shows that this intellectual failure is not inherent in the discipline of economics; there are important traditions in economic thought that the mainstream of the economics profession has simply ignored.

There is a move away from a market economy in health care in the United States and a move towards such a market in Germany.1 This article tries to make explicit what underlies the moral intuition that there is a tension between a market economy and health care. First, health care is analyzed in terms of the economic theory of the market and incompatibilities are described. The moral problem is identified as the danger of (...) liquefying the distinction between persons and things . The basic moral intuition seems to be the classical social contract: as a functioning market is governed by the principle of commutative justice , free riders have to be kept away, which is achieved by coercion that is not provided by the market; coercion can be justified by a social contract. The special moral problems of a social contract for health care are discussed. It is argued that public coercion in order to collect contributions for essential health care is justified. (shrink)

Making use of capital to develop China’s socialist market economy requires China not only to fully recognize the tendency of capital civilization but also to realize its intrinsic limitations and to seek conditions and a path for overcoming contradictions in the mode of capitalist production. Karl Marx’s theory of capital provides us with a key to understanding and dealing properly with problems of capital. At the same time we should also pay heed to Western research on, experience with, (...) and lessons from capitalist economies developed over the past four centuries summarized in the field of “business ethics”. (shrink)

The unprecedented economic changes taking place in China over the past three decades have led to significant new fiscal pressures for the central and provincial governments. The relative decline of public ownership and rise of the private sector has forced governments to substitute revenues from new taxes for the funds formerly provided by public enterprises. The shift from profit distribution to tax revenues has led to a realignment of power between local governments and the central government while the growing disparity (...) in wealth between have and have-not provinces has increased the pressure on the central government to further consolidate control over tax revenues and to apply the enhanced revenues to fund fiscal redistribution transfers. At the same time, modernization of the economy and the influx of foreign investment have created pressure to revamp tax laws and tax administration so both resemble more closely western market economy norms. These processes may lead to an irreversible shift of fiscal power from provincial governments to the central government and a consequent consolidation of political power, changing forever the political economy of modern China. (shrink)

By posing the problem of the relation between the degradation of the environment and the market economy, one presupposes a preliminary answer to a more general question: As a result of his “instincts,” is man, by necessity, predatory upon the natural order which surrounds him? If the answer to this question were affirmative, the current massacre of the environment would, at best, represent no more than an acceleration of mechanisms which are as old as the emergence of man, (...) and, if the truth be told, any hope of the relationship between man and nature finding a new balance would be in vain. It is not very likely, however, that the answer would be a positive one. For one fundamental reason, nature is to a large extent a creation of man which has constantly modified itself throughout the history of man, ever since the invention of fire. What we call ‘nature’ is a structured, mobile complex of cycles which relate to our mineral environment and our living environment and which enable man to survive on earth; and it is impossible to ignore the action of man himself within these cycles. (shrink)

The transition of the former socialists economies to the system of market economy can also be viewed as an exceptional experiment about the real nature of market economy. In this respect, the difficulties met in the transition provide fruitful informations concerning the relative importance of the different parts composing the system. In this paper, we consider the flexibility of behaviors, the time path of transformations and the role of the State during the transition. Endly, an assessment (...) of the validity of the neoclassical paradigm, as a picture of market economy, comes out.La transition des anciennes économies planifiées vers J’économie de marché représente une expérience en grandeur réelle d’une portée considérable pour l’analyse économique. Dans le cas présent, les difficultés de mise en place d’une économie de marché nous amènent à réfléchir sur l’importance réelle des différents éléments constitutifs d’un tel système. La capacité d’ajustement des comportements des agents économiques, le rythme des transformations et le rôle de l’Etat sont ainsi réexaminés. En conclusion, il apparaît que la représentation traditionnelle de l’économie de marché à travers le schéma dominant inspiré de la théorie néoclassique, qui a servi de soubassement intellectuel à la plupart des programmes se révèle peu adapté. (shrink)

Liberal market states promote the responsible consumption of potentially dangerous commodities. But the work of enforcing sumptuary law is in fact delegated to service employees in the private sector. In this article such work is termed sumptuary labor. Although the ability of states to privatize sumptuary enforcement is a remarkable accomplishment, it is by no means a seamless one. Drawing on ethnographic fieldwork among bartenders and casino dealers, the article elaborates patterned conflicts of interest that arise during the performance (...) of sumptuary labor. Both firms and workers may fail to ensure eligibility for consumption, prevent overindulgence, or guarantee the purity of the problematic commodity. The article concludes by theorizing how liberal market states manage the potential decoupling of sumptuary policy and practice. (shrink)

This article uses a case study of vocational training in Norway to explore the conditions under which employers will cooperate to increase the skill level of their workforce. It generates two sets of insights into the political economy of training in coordinated market economies. First, by demonstrating that cooperation among employers was a recent achievement that required the creation of specific, targeted mechanisms, it suggests that a cooperative outcome is difficult to attain, even amid the generally hospitable institutional (...) environment characteristic of these economies. Second, it demonstrates that the employer collective action problem with respect to the initial training of apprentices differs from that posed by the additional raining of experienced workers. This means that even within a single economy, there are several varieties of training politics, each characterized by different patterns of cooperation and conflict; this further complicates the task of creating a coordinated training regime. (shrink)

In a market economy, members of professions—or at least those for whom their profession is a vocation—are vulnerable to a distinctive kind of objectionable exploitation, namely the exploitation of their vocational commitment. That they are vulnerable in this way arises out of central features both of professions and of a market economy. And, for certain professions—the care professions—this exploitation is particularly objectionable, since, for these professions, the exploitation at issue is not only exploitation of the professional’s (...) vocational commitment but also of her even more basic commitment to morality. (shrink)

(1988). Cooperation between countries with planned and market Economies: Prospects for development and future challenges. World Futures: Vol. 25, No. 1-2, pp. 163-173.

In lieu of an abstract, here is a brief excerpt of the content:DESIRED POSSESSIONS: KARL POLANYI, RENÉ GIRARD, AND THE CRITIQUE OF THE MARKET ECONOMY Mark R. Anspach CREA, Paris! f '""phe most radical critique of liberal capitalism ever:" that is how JL Louis Dumont describes 7Ae Great Transformation, Karl Polanyi's classic work on the rise of the market system. But the French anthropologist goes on to observe that, when one confronts this same critique with the ethnography (...) of tribal societies, "one may ask whether Polanyi did not in fact come up short; having criticized the economy as an idea, he thought he could retain it as a thing..." (Dumont xiv, xvi). Is the economy indeed a "thing" that has always existed in some form everywhere, and if so, what manner of thing is it? In a word, what is an economyfor? Is there a particular aim that any economy must serve? A specific motive that it necessarily brings into play? We will begin by looking at Polanyi's answer to this question. "No human motive is per se economic," Polanyi tells us. "There is no such thing as a sui generis economic experience in the sense in which man may have a religious, aesthetic, or sexual experience." It is market society, with its dependence on a disembedded economic system, which fosters the illusion that the "economic" motives of hunger and gain necessarily underlie every economic system (1968, 63-4). In reality, however, "human beings will labor for a large variety of reasons as long as things are arranged accordingly." For example, "Monks traded for religious reasons... The KuIa trade ofthe Trobriand islanders... is mainly an aesthetic pursuit. Feudal economy was run on customary lines. With the Kwakiutl," industry appears to have been "a point of honor," and 1 82Mark R. Anspach so on (1968, 68). The trick, it seems, is to "arrange things accordingly." An economic system can be "run on noneconomic motives," Polanyi explains, without linking the process of production or distribution "to specific economic interests attached to the possession of goods," as long as "every single step in that process is geared to a number of social interests which eventually ensure that the required step be taken" (2001, 48). Now, there is a danger in this presentation. It could lead a reader to conclude that other societies arrange things cunningly so that all these social interests are harnessed to ensure the performance of the steps necessary to economic processes in a kind ofelaborate ruse—a ruse which the out-in-the-open operation ofthe economy in our society gives us the ability to see through. Very well, such a reader might acknowledge, the economy is an "instituted process," and, yes, the act of instituting it "shifts the place ofthe process in society" (Polanyi 1968, 148), but ifyou track it down to its hiding place and strip away the social contrivances in which it has been embedded, what you will find is still the economy as we know it—indeed, the economy which market society alone lays bare. In this reading, or rather misreading, the "real" economic aims that market society achieves directly are elsewhere accomplished only in the most cumbersomely indirect fashion. This kind of erroneous conclusion will likely be difficult to counter as long as one posits an opposition between multiple, variable and diffuse social interests, on the one hand, and the apparently straightforward individual interest in the possession of goods, on the other. Wherever the economy is submerged in social relationships, Polanyi says, a man "does not act so as to safeguard his individual interest in the possession ofmaterial goods; he acts so as to safeguard his social standing, his social claims, his social assets" (2001, 48). The problem with such an opposition between individual and social is that a market-minded theorist can overcome it simply by broadening the individual interest in the possession ofgoods to include the possession ofreified social goods. Once social interests are conceptualized as "social assets," to use Polanyi's own expression—or as "symbolic capital," to cite a more recent formulation—they lend themselves to "economizing" even in the formal sense, and Polanyi's carefully constructed distinction between the substantive and the formal collapses, apparently confirmingthe universality of the market... (shrink)

How do managers think about the relationship between the pursuit of economic success and ethical demands? This paper presents the main results of a qualitative-empirical study (Ulrich and Thielemann, 1992). The range of thinking patterns displayed by Swiss managers in this field of tension is elucidated and typologized. The results are then compared with those yielded by other studies on managerial ethics. Although the comparisons reveal essential parallels, the findings of previous investigations are interpreted in a considerably different manner. In (...) particular it is shown that, on the strength of a systematic conception of the fundamental problem of business ethics, the frequently heard assertion that the vast majority of managers are ethical opportunists must be revised. The internationally prevailing thinking pattern among managers does not prove to be ethical opportunism or even cynicism buteconomism, i.e. theethical conviction that economically appropriate actionin itself is ethically good as such. (shrink)

Morality and economic rationality: integrative economic ethics as the rational ethics of economic activity; Part II. Reflections on the Foundations of Economic ...

The study presented is the result of a field survey conducted in Latvia in 1991. The brief of this research was to trace the role of the ‘private’ farm sector that has begun to emerge in the wake of the transition from a central-command to a market-oriented economy. Thus a look at the legislative acts embodying the agrarian reform is ccompanied by an analysis of the recent developments in local production systems. The study of ‘production systems’, or that (...) part of economic analysis that comes under the rubric of ‘farm systems’, was employed here for the first time to analyze a Soviet-type economic system in transition. The first and second sections, which focus on the historical evolution of Latvia's agriculture and the economics underpinning it, range in compass from the ‘first’ agrarian reform to collectivization and on to the present situation. This is followed by a look at the current, or ‘third’, land reform initiative (section 3), particular emphasis being accorded the emergence of new production structures and the problems posed by the transformation of the old ones (sections 4 and 5). The next section includes a discussion of the links between the farms of the socialized sector and of the nascent private one (section 6). The concluding remarks provide a recapitulation of the study's main findings. (shrink)