ABSTRACT
This chapter discusses free markets and their constraints which are embodied in ‘background institutions’, as they are sometimes called in contemporary business ethics literature, and the background requirements that are used to justify them. It describes the background requirements of markets and explicating their nature and purpose; and evaluates their viability from a normative point of view as well as from considerations of efficiency. The infrastructure of the society is to be founded on this restriction, that is, it establishes the background institutions which would be justified in laissezfaire markets. The basic idea is that in the market there are certain self-imposed constraints, which belong among the dictates of economic prudential rationality, or ‘theorems of prudentiality’. For libertarians, the market is not a detached but the central sphere of human action and market rationality is not a special, but more like the paradigm case of human rationality.
