The Good, the Wise, and the Just

Source: American Institute for Economic Research
by Michael Munger

“Of course buyers and sellers disagree about value; that is actually a necessary condition for any transaction to take place. Paradoxically, any agreement on price requires a disagreement about value: the seller perceives the value of the thing as less than the price (that’s why she is willing to sell) and the buyer perceives the value as greater than the price (that’s why he is eager to buy). … People make fun of me, probably rightly, for always talking about ‘transaction costs.’ But Cicero recognized that distinguishing good actions from wise actions in market settings was, and is, a ‘mischievous doctrine.’ To recognize that it is to your own advantage to trust, and to be trustworthy in turn, is the key to living together in a market economy.” (10/07/21)