INTRODUCTION

In the view of mainstream economic thought, there can be no economic compulsion in an unfettered marketplace because consummated transactions are purely voluntary and evidence of mutual advantages gained. A unique strength of the market as a societal institution and as a mechanism for allocating scarce resources lies in the unparalleled degree of autonomy it affords economic agents. In the perfectly competitive markets of neoclassical economics, people are completely free to trade whatever, whenever, however, wherever, and with whom they so desire. Moreover, since economic actors are rational and pursue what is in their best interest, we can presume that they engage in market exchange only to the extent that they improve, or, at the very least, remain at, their pre-trade welfare. It makes no sense for rational agents to partake of a bargain that leaves them worse off; they trade up and not down. People participate in the market only as they see fit. Consequently, there is no room for such a notion as compelled market exchanges in mainstream economic thought. This position is not peculiar to neoclassical economists alone, as some philosophers are also skeptical of claims that economic circumstances, and by extension the market, can be coercive.

The object of this chapter is to show why and how the market's harmful unintended consequences can compel economic agents to make choices they would normally not take. To do so, however, it is first necessary to define the formal characteristics of what constitutes economic compulsion.