Market StrengthsMarket Strengths 33

Broadly tends to uphold individual freedom & responsibility (compared to hierarchical or command systems, like communism)

• High incentive to produce and innovate• Price mechanism optimally satisfies

buyer/sellers preferences in a perfect market This is the market version of “utility-maximisation” that ignores other stakeholders

• Linked to democracy, by political-right. Seen as anti-democracy by political-left (e.g. Shell in Nigeria case, narcotics trade, etc)

Market limitations: K.L.M.B.SMarket limitations: K.L.M.B.S33

• Monopolistic tendencies (& WTMM –waste; concentration of power, wealth)

• Ability to pay (initial endowment; defective consumer; how $ obtained?)

• Information (about the things being exchanged, purchased)

• ***Preference vs. well-being (also, creation of desire)

• Ignores distributive-justice (associates with envy)

• Alienation (for producer, value of product become price)

• Externalities (un-priced, pollution)

Exploit Refrain Compensate

Influence GovernmentsPartner with NGO’sExplicate the strategyProvide moral leadership

Increasing Level of Service to Society & Common Good

KLMBSWeakness of lawWeakness of enforcement

Adam Smith & Thomas Hobbes Adam Smith & Thomas Hobbes 33

• Adam Smith: Wealth of Nations 1776. emphasised justice; he is most strongly associated with the phrase “the invisible hand” of the market, ie by pursuing self interest through exchanges (ie market) the common good is served “as if by an invisible hand” (ie market)

• Thomas Hobbes: Leviathan 1651. Man is in a “state of nature”. Hobbes was an atheist. When resources are limited, conflict is inevitable, hence the need for Government (the visible hand) to keep the peace.

Plato: The Human Goods Plato: The Human Goods 33 • There are identifiable permanent human goods:

wealth, health, justice, friendship, knowledge, beauty, also human potential (i.e positive freedom)

• Governments should devise ways of maximising these in the society

• Plato argued for benevolent authoritarian govt (quite similar to Confucious)

• Hence not liked by neo-liberal “less govt” camp • Free markets emphasise peoples’ preferences

and tastes, not “goodness”. These are not the same, e.g. smoking and health