Browsing by Author "Munger, Michael C."
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Item A Theory of Just Market Exchange(2020) Guzmán, Ricardo; Munger, Michael C.The idea that unconscionable bargaining power can be an instrument of coercion can be traced back at least to Locke (2003) and Hume (1888). Hume proposed the following example: “A man, dangerously wounded, who promises a competent sum to a surgeon to cure him, wou’d certainly be bound to performance; tho’ the case be not so much different from that of one, who promises a sum to a robber.” Hume (1888; p. 125). In recent decades, this idea has attracted renewed interest among moral philosophers, most notably Frankfurt (1973; p. 71); Lyons (1975; 425–436); O’Neill (1985, 252–277); McGregor (1988, 23–50); Olsaretti (1998; 2004, 119–154), Snyder (2008, 389–405), Zwolinski (2009), and Munger (2011). More recently, Vrousalis (2013) connects exploitation with domination, seeking to define exploitation as the self-enriching instrumentalization of another’s vulnerability. Finally, the rejection of substantial inequality in bargaining strength is a condition of the exchange situation, not a condition of the wealth positions of the participants in a broader sense. The issues discussed in regard to the diminishing marginal utility of wealth and the arguments for redistribution are summarized in Schmidtz (2000). We are considering only the narrow situation of the exchange itself.Item Euvoluntariness and just market exchange: moral dilemmas from Locke’s Venditio(01/01/2014) Guzmán, Ricardo Andrés; Munger, Michael C.It is a maxim of Public Choice that voluntary exchanges should not be interfered with by the state. But what makes a voluntary market exchange truly voluntary? We suggest, contra much of the economics literature, that voluntary exchange requires consent uncoerced by threats of harm, but that this is not sufficient. In particular, a person pressured to exchange by the dire consequences of failing to exchange—e.g., dying of thirst or hunger—is still coerced, and coerced exchange cannot be voluntary. The weaker party’s desperation gives the other party unconscionable bargaining power. We argue for a distinction, based on a neologism: in the case of coercion by circumstance but not by threat, exchange is still voluntary in the conventional sense, but it is not euvoluntary (i.e., truly voluntary). We will argue that all euvoluntary exchanges are just, while non-euvoluntary exchanges may or may not be unjust; that in competitive markets all exchanges are just, even those that are not euvoluntary, while in bilateral monopolies some exchanges are neither euvoluntary nor just. We will propose a mental device, the “fictitious negotiation”, to determine the just price in non-euvoluntary market exchanges. A primitive version of these ideas can be found in a little known monograph by John Locke, which we will analyze in detail