Provide free markets just outcomes?

Seminar paper from the year 2007 in the subject Business economics - Economic Policy, grade: 1,3, Stellenbosch Universitiy (University of Stellenbosch (South Africa)), course: Modern Economic Systems and Global Capitalism, language: English, abstract: Not only in economics people often talks about markets in fairly different

circumstances. What does that mean? The Britannica Online Encyclopedia serves us

with the following definition:

¿A market is a mean by which the exchange of goods and services takes place

as a result of buyers and sellers being in contact with one another, either directly

or through mediating agents or institutions.¿1

What they call ¿means¿ could also be named as a social arrangement. Analogously to

the physical location of a street market every other form of markets is a man-made

institution in order to organize trade. Thereby it is in addition to the right of own

property probably the most salient feature of every capitalist system.

But as long as markets are not natural but social constructs, they and the way they

are shaped have to be subjects of human monitoring. Although this seems self-

evident from an impartial point of view, free markets and their results are often taken

for granted by some economists. This article focuses on the results of markets, the

so called market outcomes. More precisely it is about the justice of market outcomes

with special attention to the ideology and thought of Neo-liberalism with respect to

this subject.

During this article I will continue along the following structure: First I will expose the

possibility of market failures and distinguish these failures into traditional market

failures and another form of undesirable market outcomes, the failures-of-market

outcomes. After that, we will devote attention to the upswing of the New Right and its

ideological background. After focusing on two extremely influential thinkers ¿

Friedrich von Hayek and Robert Nozick ¿ we will examine the justice of free markets.

I will finally end up with a conclusion in which I resume the most important results

and give an overview about the implications.

[...]