Just prices

Robert C. Hockett, Roy Kreitner

Research output: Contribution to journalReview articlepeer-review

4 Scopus citations

Abstract

In what sense do market prices represent or convey value? At first glance, such prices might look like the upshot of spontaneous social aggregation without exogenously imposed order: uncoordinated individual trading decisions yield "price information" that is said both to induce socially efficient productive decisions and to set a framework that facilitates coherent and welfare-enhancing consumer choice. But while some trading decisions might well be uncoordinated, far from all of them are; and the rules within which trade is conducted are in any event the product of social choice. When we recognize that these rules of trade and certain public practices of trade affect the terms of trade, we cannot but ask whether the rules, the relevant practices, and the prices they partly produce can underwrite just social arrangements. The shorthand rendition of this question is when are market prices just? In this paper we set out to untangle some of the economic and philosophic issues implicated by this loaded question, and to propose a set of considerations that can aid evaluation of the justice (or otherwise) of market prices.

Original languageEnglish
Pages (from-to)771-796
Number of pages26
JournalCornell journal of law and public policy
Volume27
Issue number3
StatePublished - Mar 2018

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