Abstract
As previously stated in the pages of this book, the allocation of goods is a problem because of the fact of scarcity. Each time a person gets something, that much less is left for others; and each time a source is assigned to produce something, a little bit of something else is not produced. Every society has to face those two fundamental problems, which are fundamentally the questions of who gets what and who does what. And the desire for more utility leads to activity to resolve conflicts of interest; that is, desire for greater utility leads to competition. As long as we live in a world of scarcity we cannot reduce or eliminate competition. However, we can choose between alternative modes of competition. Different societies develop different institutions which, in turn, affect the answers to the questions who gets what and who does what. This and the following chapter discuss the effects of private ownership and contractual freedom on exchange and production, respectively.
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Suggested Readings
Alchian, A. “Some Implications of Property Rights Transaction Costs,” in Economics and Social Institutions (K. Brunner, ed.), Boston: M. Nijhoff, 1979.
Alchian, A. and Allen, W. University Economics, Belmont: Wadsworth, third edition, 1972, chapter 4–9.
Brunner, K. “The Limits of Economic Policy,” in Socialism: Institutional. Philosophical and Economic Issues (S. Pejovich, ed.), Dordrecht: Kluwer Academic Publishers, 1987.
Posner, R. Economic Analysis of Law, New York: Brown, 1986, chapter 2–4.
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© 1990 Kluwer Academic Publishers
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(1990). Exchange in a Private Property Capitalist Economy. In: The Economics of Property Rights: Towards a Theory of Comparative Systems. International Studies in Economics and Econometrics, vol 22. Springer, Dordrecht. https://doi.org/10.1007/978-0-585-28557-3_5
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DOI: https://doi.org/10.1007/978-0-585-28557-3_5
Publisher Name: Springer, Dordrecht
Print ISBN: 978-0-7923-0878-2
Online ISBN: 978-0-585-28557-3
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