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Foka-Kavalieraki & Hatzis on the Foundations of a Market Economy

By Lawrence Solum

Yulie Foka-Kavalieraki and Aristides N. Hatzis (University of Athens, Department of Philosophy & History of Science and University of Athens - Department of Philosophy & History of Science) have posted The Foundations of a Market Economy: Contract, Consent, Coercion (European View, Vol. 9, No.1, pp. 29-37, June 2009) on SSRN. Here is the abstract:

This article shows how contracts are the institutional foundation of a market economy. Contracts create wealth, allocate risk and are based on consent. There is no perfect competition and the markets are characterized by a number of failures; therefore, contracts are not perfect. However, the existence of these failures does not undermine the importance of contract and consent. A common critique of the market economy is that most transactions are based on some form of coercion. The authors try to address this misconception by showing that a contract is the result of coercion not in cases where a choice is hard for a party but when it offers a choice the party does not want to have.

Full post as published by Legal Theory Blog on December 31, 2009 (boomark / email).