Book contents
- Frontmatter
- Contents
- Acknowledgments
- The Moral Ecology of Markets
- 1 Thinking Ethically About Economic Life
- PART I SELF-INTEREST, MORALITY, AND THE PROBLEMS OF ECONOMIC LIFE
- 2 De-Moralized Economic Discourse About Markets
- 3 The Moral Defense of Self-Interest and Markets
- 4 The Moral Critique of Self-Interest and Markets
- 5 The Four Problems of Economic Life
- PART II THE MORAL ECOLOGY OF MARKETS
- Bibliography
- Index
5 - The Four Problems of Economic Life
Published online by Cambridge University Press: 05 June 2012
- Frontmatter
- Contents
- Acknowledgments
- The Moral Ecology of Markets
- 1 Thinking Ethically About Economic Life
- PART I SELF-INTEREST, MORALITY, AND THE PROBLEMS OF ECONOMIC LIFE
- 2 De-Moralized Economic Discourse About Markets
- 3 The Moral Defense of Self-Interest and Markets
- 4 The Moral Critique of Self-Interest and Markets
- 5 The Four Problems of Economic Life
- PART II THE MORAL ECOLOGY OF MARKETS
- Bibliography
- Index
Summary
One way to understand the strengths and weaknesses of markets is to ask, “What should an economy do?” Many of the differences in the evaluation of markets can be traced to differences in emphasis in the kind of problems that the proponents and critics of markets believe an economic system must address.
In a classic essay from the 1920s, Frank H. Knight outlined five problems that any economy must address. For our purposes they can be grouped into two categories. The first category – including problems one, two, four, and five in Knight's list – concerns what is to be produced, how it is to be produced, how much of production goes to immediate consumption and how much to investment, and how to adjust consumption when production in the short run is greater or less than usual. These are the issues where the discipline of economics has historically felt most at home. Thus, one quite standard definition of economics in the introductory textbooks is as follows:
Economics is the study of how individuals, experiencing virtually limitless wants, choose to allocate scarce resources to best satisfy their wants.
The second category, Knight's third problem to be solved, is what he calls “the function of distribution,” the social determination concerning who gets what goods and services produced in the nation. Although the moral issues surrounding distribution are universally noted by economists, economics itself has in general limited its work to identifying the empirical results of who gets what without entering into the more fundamental question “Who should get what?”
- Type
- Chapter
- Information
- The Moral Ecology of MarketsAssessing Claims about Markets and Justice, pp. 76 - 100Publisher: Cambridge University PressPrint publication year: 2006