Econ 1: Spring 2016: U.C. Berkeley: The Market Economy: Con
Econ 1: Spring 2016: U.C. Berkeley: "The Market" as an Institution

Econ 1: Spring 2016: U.C. Berkeley: The Market Economy: Pro

"Therefore shall ye lay up these my words in your heart and in your soul, and bind them for a sign upon your hand, that they may be as frontlets between your eyes. And ye shall teach them your children, speaking of them when thou sittest in thine house, and when thou walkest by the way, when thou liest down, and when thou risest up. And thou shalt write them upon the door posts of thine house, and upon thy gates..."

The market failure-free competitive market in equilibrium, from the perspective of a utilitarian seeking to achieve the greatest-good-of-the-greatest-number, accomplishes these goals:

  1. It produces at a scale that exhausts all possible win-win exchanges—and is “efficient” in that sense.
  2. It allocates the roles of producers and sellers to those who can make and sell them in a way least costly to society’s overall resources—to those with the lowest opportunity cost.
  3. It rations the commodities produced to those with the greatest willingness-to-pay—to those who, by the money standard, "need" and want them "the most".