PHIL384 - Markets, Labour, Exchange

Division of Labour (Adam Smith)

Productivity rises when workers specialize; efficiency depends on market size.

Invisible Hand (Adam Smith)

Individual self-interest unintentionally benefits society through market coordination.

Specialization (Adam Smith)

Assigning tasks based on skill or comparative advantage increases total output.

Market Size (Adam Smith)

Extent of the market limits specialization; small markets restrict efficiency.

Human Capital (Adam Smith)

Accumulated skills and education that raise productivity and economic growth.

Technological Development (Smith)

Innovation and tools amplify labor's effectiveness and drive long-term growth.

Comparative Advantage (Smith)

Nations gain by specializing in goods with the lowest opportunity cost.

Hayek's Knowledge Problem (Friedrich Hayek)

No central planner can aggregate dispersed knowledge as effectively as markets.

Price System (Hayek)

Prices convey information about scarcity and preferences, guiding efficient resource use.

Decentralized Decision-Making (Hayek)

Individual actors use local knowledge; markets harness that information.

Resource Allocation (Hayek)

The price mechanism coordinates production and consumption without central control.

Economic Planning Critique (Hayek)

Central planning fails because knowledge is tacit, local, and ever-changing.

Spontaneous Order (Hayek)

Complex coordination emerges naturally through market interactions, not design.

Price Controls (Hayek)

Interference with price signals distorts incentives and leads to shortages or surpluses.

Black Markets (Hayek)

Arise when state restrictions prevent legal satisfaction of demand.

Nozick's Entitlement Theory (Robert Nozick)

Justice in holdings depends on legitimate acquisition, transfer, and rectification.

Acquisition Principle (Nozick)

One may appropriate unowned resources if others are left "enough and as good."

Transfer Principle (Nozick)

Voluntary exchanges preserve justice if both parties consent.

Rectification Principle (Nozick)

Past injustices in acquisition or transfer require compensation.

Wilt Chamberlain Argument (Nozick)

Voluntary transactions can create inequality without injustice if rights are respected.

Minimal State (Nozick)

Government's only role is protection of rights; redistribution violates liberty.

Cohen's Response to Nozick (G.A. Cohen)

Voluntary inequalities can still reflect unfair background conditions.

Informed Consent (Cohen)

True consent requires equality of power and opportunity, not just absence of coercion.

Cohen's Camping Trip (Cohen)

Illustrates socialism's ideals of equality and community through cooperative living.

Equality Principle (Cohen)

People should share benefits and burdens fairly, not through market bargaining.

Community Principle (Cohen)

Members support each other's welfare, motivated by mutual concern.

Market vs. Community (Cohen)

Markets reward talent and luck; community values reciprocity and shared purpose.

Feasibility vs. Desirability (Cohen)

Socialism may be morally superior but difficult to implement at large scale.

Human Nature vs. Social Design (Cohen)

Obstacles to socialism stem more from poor institutions than innate selfishness.

Market Socialism (Cohen, Roemer, Carens)

Hybrid system combining efficiency of markets with egalitarian distribution.

Cohen's Critique of Market Incentives

Markets rely on greed and fear—effective but morally "repugnant" motivations.

Relational Egalitarianism (Cohen)

Justice concerns not only outcomes but social relations of equality and respect.

Domination (Cohen)

Power imbalance where one group's freedom depends on another's permission or resources.

Status Hierarchies (Cohen)

Market outcomes reinforce class stratification and undermine community.

Burkean Conservatism (key idea)

Values tradition and gradual reform over radical economic redesign.

Argument Structure (method)

Premise → intermediate steps → conclusion; evaluate for validity and soundness.

Debunking a Premise (analysis)

Showing a premise is based on false assumptions or biased analogy.

Cohen's Overall Claim (summary)

A just society extends the cooperation and equality of the camping trip across economic life.