The Institutional Justice of the Market Process: Entrepreneurship, Increasing Returns, and Income Distribution.

28 Pages Posted: 19 Mar 2018 Last revised: 25 Mar 2018

See all articles by Peter J. Boettke

Peter J. Boettke

George Mason University - Department of Economics

Rosolino Candela

Mercatus Center at George Mason University

Kaitlyn Woltz

George Mason University - Department of Economics

Date Written: March 15, 2018

Abstract

We argue in this chapter that the transformation in the vision of economics from one in terms of processes to one in terms of equilibrium would in turn yielded public policy implications regarding the role of government and distributive justice. Although classical political economists had made a case regarding the institutional justice of the market process, this argument became overshadowed in the late 19th century and early 20th century by early neoclassical economists, who defended the market in terms of the equilibrium pricing of factor payments. Justice according to the early neoclassical economists was defined in terms of market outcomes that approximate the marginal valuation of the productive contribution of each factor of production. The persistence of this equilibrium paradigm today, among both proponents and critics of the market, has led to the notion that income equality is a substitute, not a complement to economic prosperity.

Keywords: Distributive Justice; Entrepreneurship; Increasing Returns

JEL Classification: B1; B21; D33

Suggested Citation

Boettke, Peter J. and Candela, Rosolino and Woltz, Kaitlyn, The Institutional Justice of the Market Process: Entrepreneurship, Increasing Returns, and Income Distribution. (March 15, 2018). GMU Working Paper in Economics No. 18-07. Available at SSRN: https://ssrn.com/abstract=3141283 or http://dx.doi.org/10.2139/ssrn.3141283

Peter J. Boettke

George Mason University - Department of Economics ( email )

4400 University Drive
Fairfax, VA 22030
United States
703-993-1149 (Phone)
703-993-1133 (Fax)

Rosolino Candela (Contact Author)

Mercatus Center at George Mason University ( email )

4400 University Drive
Fairfax, VA 22030
United States

Kaitlyn Woltz

George Mason University - Department of Economics ( email )

4400 University Drive
Fairfax, VA 22030
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
69
rank
313,865
Abstract Views
350
PlumX Metrics