Skip to main content
SpringerLink
Log in

Just Prices, Market (In)Efficiency and Wealth (In)Equality

  • Conference paper
  • First Online:
Law and Economics of Justice (ILEC 2023)

Part of the book series: Economic Analysis of Law in European Legal Scholarship ((EALELS,volume 17))

Included in the following conference series:

  • 19 Accesses

Abstract

This chapter analyses the normative appeal of a conception of the just price based on the value of market efficiency (the ‘Efficiency Conception’). The chapter suggests that the Efficiency Conception is a normatively attractive conception of the just price only under conditions of wealth equality and discusses two common objections to the feasibility of a price system committed to wealth equality.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 149.00
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Hardcover Book
USD 199.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Notes

  1. 1.

    Dworkin (2011), p. 160.

  2. 2.

    Dworkin (1977), p. 167; See also Dworkin (1986), p. 70; (2006), pp. 10–11, (2011) pp. 158–170.

  3. 3.

    Langholm (1979), p. 580, (1998), p. 85.

  4. 4.

    Reyes (2021).

  5. 5.

    Walsh and Lynch (2008), p. 135.

  6. 6.

    The canonical statement of these theorems is given by Arrow (1951), pp. 90–97.

  7. 7.

    Hayek (1945), p. 35; (1948), (2002), p. 9.

  8. 8.

    Heath (2018), p. 27.

  9. 9.

    Posner and Weyl (2018); For another defence of efficiency as a justification for the price mechanism, see Heath (2018).

  10. 10.

    Gordley (2001), p. 323.

  11. 11.

    For a concise but clear analysis of both efficiency criteria, with a focus on the economic analysis of law, see Mathis (2009), pp. 31–50.

  12. 12.

    Gordley (1981), (2001), (2022).

  13. 13.

    Reyes (2021), (2023).

  14. 14.

    Posner and Weil (2018).

  15. 15.

    As noted by Pistor (2019), pp. 230–231.

  16. 16.

    On this, see Mises (1932); Hayek (1945); Steele (1992).

  17. 17.

    Heath (2018), p. 30.

  18. 18.

    Ibid.

  19. 19.

    Lee (2018), pp. 1–2.

  20. 20.

    Sen (1982), pp. 54–73; Pettit (2001).

  21. 21.

    MacIntyre (2016), p. 77. See also ibid. pp. 183–189.

  22. 22.

    Kahneman, Knetsch & Thaler (1990), p. 1325.

  23. 23.

    On the prospect theory of choice, see Kahneman, Slovic & Tversky (1982); Kahnemann and Tversky (2000); Gilovich, Griffin an d Kahnemann (2002).

  24. 24.

    Luetchford and Orlando (2019), p. 2.

  25. 25.

    Herzog (2020).

  26. 26.

    Susanna Rustin, ‘This Cry for Help on a Primark Label Can’t Be Ignored | Susanna Rustin’ The Guardian (25 June 2014) <https://www.theguardian.com/commentisfree/2014/jun/25/primark-label-swansea-textile-industry-rana-plaza> accessed 27 February 2023; ‘Primark Claims “cry for Help Labels” Are a Hoax Carried out in the UK’ (The Independent, 28 June 2014) <http://www.independent.co.uk/news/uk/home-news/primark-claims-cry-for-help-labels-are-a-hoax-carried-out-in-the-uk-following-investigation-9569990.html> accessed 27 February 2023.

  27. 27.

    Marx (1890), pp. 279–280.

  28. 28.

    Samuelson (1957), p. 47. See also Roemer (1988), pp. 90–107, (1994), p. 37; Burczak (2006), pp. 105–107.

  29. 29.

    Cf Collingwood (1926), pp. 175–176; Heath (2018), pp. 27–28.

  30. 30.

    Posner and Weyl (2018).

  31. 31.

    Smith (1976), p. 48.

  32. 32.

    Posner and Weyl (2018).

  33. 33.

    Cf Steiner (1984).

  34. 34.

    Dworkin (2000); For a critique of the way Dworkin understands the auction mechanism, see Heath (2004).

  35. 35.

    Cf Carens (1981), pp. 12–17, 23–93.

  36. 36.

    Hayek (1944), p. 129.

  37. 37.

    Ibid.

  38. 38.

    See Hayek (1990), pp. 39–48.

  39. 39.

    Cf Reyes (2023).

  40. 40.

    Marx (1968), pp. 225–226; For an insightful comment on this passage, and on Marxism’s attitude towards social reform, see Cohen (2000), pp. 71–72, 58–78.

  41. 41.

    Cf Dagan (2020), p. xvi; Dworkin (1981), p. 283.

  42. 42.

    Mises (1932); On the economic calculation problem, see generally Steele (1992).

  43. 43.

    Rawls (1971), p. 3.

  44. 44.

    For a similar point, see Cohen (2008), pp. 302–307.

  45. 45.

    Heath (2018).

  46. 46.

    The case for the feasibility of a scheme in which equality and efficiency are satisfied has been made, among others, by Carens (1981), (1986); Wilkinson (2000); White (2003); Cohen (2008).

  47. 47.

    Cohen (2008), pp. 27–86.

  48. 48.

    Narveson (1978), p. 281; Quoted with approval in Cohen (2008), p. 27.

  49. 49.

    Cf Bowles (2016), pp. 9–39.

  50. 50.

    Ibid. p. 16.

  51. 51.

    For this paragraph, see Bowles (2016) passim, but especially pp. 21–25.

Bibliography

  • Arrow K (1951) An extension of the basic theorems of classical welfare economics. In: Neyman J (ed) Proceedings of the second berkeley symposium on mathematical statistics and probability, University of California, Oakland

    Google Scholar 

  • Bowles S (2016) The moral economy: why good incentives are no substitutes for good citizens, New Haven

    Google Scholar 

  • Burczak T (2006) Socialism after Hayek, Ann Arbor

    Google Scholar 

  • Carens J (1981) Equality, moral incentives, and the market: an essay in utopian politico-economic theory, Chicago

    Google Scholar 

  • Carens J (1986) Rights and duties in an egalitarian society. Political Theory 14:31, et seqq.

    Google Scholar 

  • Cohen GA (2000) If you’re an Egalitarian, How Come You’re So Rich?, Cambridge

    Google Scholar 

  • Cohen GA (2008) Rescuing justice and equality, Cambridge

    Google Scholar 

  • Collingwood RG (1926) Economics as a philosophical science. Int J Ethics 36:162, et seqq.

    Google Scholar 

  • Dagan H (2020) The law of the market. Law Contemp Problems 83(2):i–xviii

    Google Scholar 

  • Dworkin R (1977) Taking rights seriously, London

    Google Scholar 

  • Dworkin R (1981) What is equality? Part 2: equality of resources. Philos Public Affairs 10:283, et seqq.

    Google Scholar 

  • Dworkin R (1986) Law’s empire, London

    Google Scholar 

  • Dworkin R (2000) Sovereign virtue: the theory and practice of equality, Cambridge

    Google Scholar 

  • Dworkin R (2006) Justice in robes, Cambridge

    Google Scholar 

  • Dworkin R (2011) Justice for hedgehogs, Cambridge

    Google Scholar 

  • Gilovich T, Griffin D, Kahneman D (eds) (2002) Heuristics and biases: the psychology of intuitive judgment, Cambridge

    Google Scholar 

  • Gordley J, Jiang H (2020) Contract as voluntary commutative justice. Michigan State Law Rev 725–801

    Google Scholar 

  • Gordley J (1981) Equality in exchange. California Law Rev 69:1587, et seqq.

    Google Scholar 

  • Gordley J (2001) Contract law in the Aristotelian tradition. In: Benson P (ed) The theory of contract law: new essays

    Google Scholar 

  • Hayek F (1945) The use of knowledge in society. Am Econ Rev 35:519–530

    Google Scholar 

  • Hayek F (2002) Competition as a discovery procedure. Quarterly J Austrian Econ 5(3):9–23

    Article  Google Scholar 

  • Hayek F (1944) The road to Serfdom, London

    Google Scholar 

  • Hayek F (1948) The meaning of competition. In: Individualism and economic order, pp. 92–106

    Google Scholar 

  • Hayek F (1990) The constitution of liberty, London

    Google Scholar 

  • Heath J (2018) On the very idea of a just wage. Erasmus J Philos Econ 11(2):1–33

    Article  Google Scholar 

  • Heath J (2004), Dworkin’s auction, politics. Philos Econ 3:313, et seqq.

    Google Scholar 

  • Herzog L (2020) The epistemic division of labour in markets: knowledge, global trade and the preconditions of morally responsible agency. Econ Philos 36(2):266–286

    Article  Google Scholar 

  • Kahneman D, Knetsch J L & Thaler R H (1990) Experimental Tests of the Endowment Effect and the Coase Theorem, Journal of Political Economy, Vol. 98, pp. 1325 et seqq.

    Google Scholar 

  • Kahneman D, Slovic P, Tversky A (eds.) (1982) Judgment under uncertainty: heuristics and biases, Cambridge

    Google Scholar 

  • Kahneman D, Tversky A (eds) (2000) Choices, values, and frame, Cambridge

    Google Scholar 

  • Langholm O (1979) Price and value in the aristotelian tradition: a study in scholastic economic sources, New York

    Google Scholar 

  • Langholm O (1998) The legacy of scholasticism in economic thought: antecedents of choice and power, Cambridge

    Google Scholar 

  • Lee FS (2018) Microeconomic theory: a heterodox approach. London

    Google Scholar 

  • Luetchford P, Orlando G (eds) (2019) The politics and ethics of the just price: ethnographies of market exchange, Bingley

    Google Scholar 

  • MacIntyre A (2016) Ethics in the conflicts of modernity: an essay on desire, practical reasoning, and narrative, Cambridge

    Google Scholar 

  • Marx K (1890) Capital: a critique of political economy 1(4)

    Google Scholar 

  • Marx K (1968) ‘Wages, Price and Profit’, In Marx and Engels: selected works in one volume, London, pp. 185–226

    Google Scholar 

  • Mathis K (2009) Efficiency instead of justice? Searching for the Philosophical Foundations of the Economic Analysis of Law, London

    Book  Google Scholar 

  • Mises L (1932), Socialism: an economic and sociological analysis, vol 2, Indianapolis

    Google Scholar 

  • Narveson J (1978) Rawls on equal distribution of wealth. Philosophia 7:281, et seqq.

    Google Scholar 

  • Pettit P (2001) The virtual reality of homo economicus. In: Mäki U(ed) The economic worldview: studies in the ontology of economics, Cambridge, pp. 75–97

    Google Scholar 

  • Pistor K (2019) The code of capital: how the law creates wealth and inequality, Oakland

    Google Scholar 

  • Posner E, Weyl EG (2018) Radical markets: uprooting capitalism and democracy for a just society, Princeton

    Google Scholar 

  • Rawls J (1971) A theory of justice, revised edition, Cambridge

    Google Scholar 

  • Reyes J (2021) Beyond commutative justice: contract law, justice, and just prices, Latin American. Leg Stud 7:363–390

    Google Scholar 

  • Reyes J (2023) Just price theory: a reassessment, London

    Google Scholar 

  • Roemer J (1988) Free to Lose: an introduction to Marxist economic philosophy, Harvard

    Google Scholar 

  • Roemer J (1994) Egalitarian perspectives: essays in philosophical economics, Cambridge

    Google Scholar 

  • Samuelson P (1957) Wages and interest: a modern dissection of marxian economic models. Am Econ Rev 47:884, et seqq.

    Google Scholar 

  • Sen A (1982) Choice. Welfare and Measurement, Chicago

    Google Scholar 

  • Smith A (1976) An inquiry into the nature and causes of the wealth of nations, vol 1, Indianapolis

    Google Scholar 

  • Steele DR (1992) From Marx to Mises: post-capitalist society and the challenge of economic calculation, Chicago

    Google Scholar 

  • Steiner H (1984) A liberal theory of exploitation. Ethics 94 :225, et seqq.

    Google Scholar 

  • Walsh A, Lynch T (2008) The morality of money: an exploration in analytic philosophy, London

    Google Scholar 

  • White S (2003) The civic minimum: on the rights and obligations of economic citizenship, Oxford

    Google Scholar 

  • Wilkinson TM (2000) Freedom, efficiency, and equality, London

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Universidad San Sebastián, Santiago, Chile

    Joaquín Reyes

Authors
  1. Joaquín Reyes
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Joaquín Reyes .

Editor information

Editors and Affiliations

  1. Faculty of Law, University of Lucerne, Lucerne, Switzerland

    Klaus Mathis

  2. School of Law, University of Notre Dame, Notre Dame, IN, USA

    Avishalom Tor

Rights and permissions

Reprints and permissions

Copyright information

© 2024 The Author(s), under exclusive license to Springer Nature Switzerland AG

About this paper

Check for updates. Verify currency and authenticity via CrossMark

Cite this paper

Reyes, J. (2024). Just Prices, Market (In)Efficiency and Wealth (In)Equality. In: Mathis, K., Tor, A. (eds) Law and Economics of Justice. ILEC 2023. Economic Analysis of Law in European Legal Scholarship, vol 17. Springer, Cham. https://doi.org/10.1007/978-3-031-56822-0_3

Download citation

  • DOI: https://doi.org/10.1007/978-3-031-56822-0_3

  • Published:

  • Publisher Name: Springer, Cham

  • Print ISBN: 978-3-031-56821-3

  • Online ISBN: 978-3-031-56822-0

  • eBook Packages: Law and CriminologyLaw and Criminology (R0)

Publish with us

Policies and ethics

Search

Navigation