Public Choice

, Volume 158, Issue 1–2, pp 39–49 | Cite as

Euvoluntariness and just market exchange: moral dilemmas from Locke’s Venditio

Article

Abstract

It is a maxim of Public Choice that voluntary exchanges should not be interfered with by the state. But what makes a voluntary market exchange truly voluntary? We suggest, contra much of the economics literature, that voluntary exchange requires consent uncoerced by threats of harm, but that this is not sufficient. In particular, a person pressured to exchange by the dire consequences of failing to exchange—e.g., dying of thirst or hunger—is still coerced, and coerced exchange cannot be voluntary. The weaker party’s desperation gives the other party unconscionable bargaining power. We argue for a distinction, based on a neologism: in the case of coercion by circumstance but not by threat, exchange is still voluntary in the conventional sense, but it is not euvoluntary (i.e., truly voluntary). We will argue that all euvoluntary exchanges are just, while non-euvoluntary exchanges may or may not be unjust; that in competitive markets all exchanges are just, even those that are not euvoluntary, while in bilateral monopolies some exchanges are neither euvoluntary nor just. We will propose a mental device, the “fictitious negotiation”, to determine the just price in non-euvoluntary market exchanges. A primitive version of these ideas can be found in a little known monograph by John Locke, which we will analyze in detail.

Keywords

Exchange Regulation Price-gouging Contractarianism 

References

  1. Buchanan, J. (1975). The limits of liberty: between anarchy and Leviathan. Chicago: University of Chicago. Google Scholar
  2. Epstein, R. (2003). The ‘necessary’ history of property and liberty. Chapman Law Review, 6(1), 1–29. Google Scholar
  3. Gramsci, A. (1929/2011). The prison notebooks (Vol. I). New York: Columbia University Press. Google Scholar
  4. Guzmán, R. A., & Munger, M. C. (2013). An analytical theory of just market exchange. PPE working paper #13.0201. Duke University, Durham Google Scholar
  5. Hume, D. (2003). A treatise of human nature. London: Oxford University Press. Google Scholar
  6. Kelly, P. (1991). Introduction to Locke on money. London: Oxford University Press. Google Scholar
  7. Lamb, R. (2010). Locke on ownership, imperfect duties and ‘the art of governing’. British Journal of Politics & International Relations, 12(1), 126–141. CrossRefGoogle Scholar
  8. Lamba, S., & Mace, R. (2013). The evolution of fairness: explaining variation in bargaining behavior. Proceedings of the Royal Society: Biological Sciences, 280(1750), 2012–2028. Google Scholar
  9. Liggio, L. (1999). The pilgrimage to liberty. Journal des Economistes et des Etudes Humaines, 9(4), 8–17. CrossRefGoogle Scholar
  10. Locke, J. (1661/2003). Venditio. In D. Wooton (Ed.), Locke: political printings (pp. 442–446). Indianapolis: Hackett Publishing. Google Scholar
  11. Müller, C. (2002). The methodology of contractarianism in economics. Public Choice, 113(3/4), 465–483. CrossRefGoogle Scholar
  12. Munger, M. (2011). Euvoluntary or not, exchange is just. Social Philosophy and Policy, 28(2), 192–211. CrossRefGoogle Scholar
  13. Olsaretti, S. (2004). Liberty, desert, and the market. Cambridge: Cambridge University Press. CrossRefGoogle Scholar
  14. Powell, B., & Stringham, E. (2009). Public choice and the economic analysis of anarchy: a survey. Public Choice, 140, 503–538. CrossRefGoogle Scholar
  15. Rowley, C. (1998). Locke, John (1672–1704). In P. Newman (Ed.), The new Palgrave dictionary of economics and the law (Vol. II). London: Macmillan. Google Scholar
  16. Sandel, M. (1998). What money can’t buy: the moral limits of markets. The Tanner lectures on human values, delivered at Brasenose College, Oxford, May 11 and 12, 1998. Google Scholar
  17. Vaughn, K. I. (1980). John Locke: economist and social scientist. Chicago: University of Chicago Press. CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media New York 2013

Authors and Affiliations

  1. 1.Centro de Investigación en Complejidad Social and Facultad de GobiernoUniversidad de DesarrolloSantiagoChile
  2. 2.Departments of Economics and Political ScienceDuke UniversityDurhamUSA

Personalised recommendations