ABSTRACT
Do markets make the conditions for moral action possible? To answer this question, this chapter develops the normative implications of competition in the market process. As a value-free science, positive economics illustrates the economic consequences of different forms of competitive behaviour for resource allocation and income distribution. This chapter explores the normative implications of competition under alternative institutional arrangements. The chapter distinguishes between catallactic competition, based upon an individual’s willingness and ability to pay for resources generated through trade and productive specialization, and non-catallactic competition, based upon legal status and privilege generated through political exchange. The normative implication of substituting market, or catallactic, competition for non-market, or non-catallactic, competition is that the conditions for human flourishing are made possible. Whereas catallactic competition tends to liberate the individual from arbitrary assignments of resources and income based on creed, gender, race, or legal status, non-cattalactic competition tends to confine an individual’s potential for self-actualization to such arbitrary assignments.
