12 - Distribution of Property Flashcards
1
Q
Four questions about the distribution of property
A
1) Who owns what?
2) Why do people produce?
3) How are goals distributed?
4) What determines what goods get produced?
2
Q
What makes a pure capitalist free market?
A
- Private property rights
- Production for profit
- Distribution by voluntary exchange
- Free competition
3
Q
What is a planned economy?
A
- State owns all major property
- Production for needs, not for profits
- Distribution by central allocation
- State controls what gets purchased and puts it out there for the people
4
Q
What is a modified free market?
A
- Some state-owned enterprises
- Some voluntary contribution (charity)
- Some state-owned monopolies
- Sale of some goods is prohibited
5
Q
What does Fredrich Hayck say about market efficiency?
A
- Markets convey information
- Prices can signal shortages or surpluses
- Profit provides incentives to produce
- Want satisfaction and Pareto improvement
6
Q
What is market failure?
A
- Markets, by themselves, don’t always function efficiently
- Some goods have externalities
- Cost or benefit of producing these goods is externalized
7
Q
Negative externatlities
A
- Cost nothing to the consumer who would rather not have them
- Free markets over supply them
- It is cheaper to make others pay the costs
8
Q
Positive externalities
A
- Goods with positive externalities cost nothing to the consumer who wants them
- Public goods: If provided, they benefit everyone
- Free markets under supply them (companies are not inclined to do good things because of the cost)
- Incentive to free ride
9
Q
How might one improve the free market?
A
- Internalize externalities
- Make it illegal or more costly to produce some goods with negative externalities
- The state provides public goods and taxes citizens to pay for them
10
Q
Rawls’ principles
A
The basic structure of society brings the basic features of a just society
11
Q
What is the hypothetical social contract?
A
- Initial hypothetical choice situation
- The Original Position (OP), with its veil of ignorance, models equality of concern
What principles of distributive justice would be chosen there?
- Basic Liberties
- Fair Equality of Opportunity
- The Difference Principle
12
Q
Why must people in the original position (POPs) be impartial?
A
- Veil of ignorance rules out bias
- Can’t benefit self at the expense of others
- Don’t know my intelligence, economic class, talents, sex, sexual preference, race, social status
13
Q
How does the hypothetical social contract model impartiality?
A
- Self-interest + ignorance = impartiality
- Wolff’s first example: how to referee when you don’t know which team you want to win?
- Wolff’s second example: you have amnesia and body bandages; now design a society
