ABSTRACT
The pure concept of the private market embodies, at its heart, as the constitution of its private character, its distinction from public regulation through hierarchical intervention. The first or basic claim of welfare economics12 is that a market which conforms to the assumptions established by neo-classical micro-economics for general competitive equilibrium13 is a perfectly efficient mechanism for the allocation of goods.14 Under general competition, goods will be exchanged up to the point where the increase in one person’s utilities achieved by further exchange would be more than offset by the diminution in the sum of another person’s. At this point of ‘Pareto optimality’,15 the market is in equilibrium because there are no further mutually beneficial exchange opportunities and, vitally importantly, it has been brought there by the uncoordinated working out of voluntary exchanges which automatically identify the point of Pareto optimality by reaching equilibrium.
