Wednesday, November 11, 2015

Family and Market: Different Forms, Same Rules

The market is a family of strangers. The family is a market of acquaintances. The things that prevent markets from functioning like families are transaction costs, imperfect knowledge, and the psychological requirements of intimacy. However, the prudential and moral principles that these two institutions embody are essentially the same: reciprocal philanthropy and the harmony between cooperation and competition.

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