Role of Ethical Behavior in a Free Market

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Status: Finished  |  Genre: Editorial and Opinion  |  House: Booksie Classic
This paper determines how free markets still thrive and grow in the U.S.

Submitted: January 12, 2011

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Submitted: January 12, 2011

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January 12, 2011

Economics

 

What Is the Role of Ethical Behavior in a Free Market?

 

 

Millions of people in the world have purchased and sold things through a free market. Companies such as EBay and Amazon encourage people to buy and sell products through their online organizations. How have these companies grown so much in popularity in the last decade? Has ethical behavior played a part in their growth? Of course there must be fair conduct between sellers and customers when they interact in a free market, but this behavior can easily be guided through the “invisible hand.”

What is the “invisible hand”? The invisible hand is basically the idea that people pursuing their own self-interest tend to promote the good of their community. When a person sells though an online market such as Amazon, he will want to receive good reviews and ratings for his service and products, so that when he tries to sell something else, customers will accept him as trustworthy. These sellers are guided by the “invisible hand.” In order to make money, they must act with ethical behavior towards their customers, or they will damage their chance of selling more products. Likewise, on EBay, when a customer shows behavior which isn’t up to the sellers’ standards, then the seller can refuse to do any more business with him. Both buyers and sellers have incentive to behave fairly and both come out winners even if their motives have been selfish.

Because of self-interest and the “invisible hand”, free markets thrive in today’s world.  The goal in a free market is to move products from people who value them less, to people who value them more. This creates enormous prosperity. Countries with the least government intrusion in the market (but that uphold private property rights and enforce contracts) enjoy the greatest amount of prosperity and the highest degree of ethical behavior. Fortunately the United States still has enough of a free market that we as a people enjoy unprecedented prosperity and high moral values.

 


© Copyright 2020 Peter Marriott. All rights reserved.

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