an economic system that is based on free exchange, contracts and self-interested activites that do not violate the right to life, liberty and private property. In its purest form, has delivered more people from starvation and homelessness than any other economic system ever experimented with. As an economic system it's based on maximum liberty and minimum security.
championed by the economist, Friedrich Hayek. According to Hayek, the idea that a harmonious, evolving order arises from the interaction of a decentralized, heterogeneous group of self-seeking individuals with limited knowledge. i.e."i am pencil"
Adam Smith was a Scottish professor of logic and moral philosophy who, in 1776, published a landmark book titled An Inquiry into the Nature and Causes of the Wealth of Nations. Claimed that man, by his very nature is driven to make decisions based on the overriding feeling of self-interest. (enlightened self-interest) Considered the father of economic thinking.
the type of behavior where both parties end up better off than before, is what gets things done in our world-even when it comes to miracles....
manifests itself in the form of a lack of awarenes or foresight when it comes to social and political trends.
an englishman who lived under the rule of Charles II, became famous with the publication of two treatises on government in 1690. According to him the state of nature was one in which "all men are by nature free, equal and independent" and all enjoy " the rights of life, liberty and property".
to the founders, meant your right to do anything that is peaceful.
there are only 3, life, liberty and property. Once something is called this the government has a legal obligation to secure them. We don't have to prove we deserve them, they are part of the contract we have with our elected officials.
not treated in an efficient manner because no one individual has an incentive to preserve the good.
exists when a transaction between two parties leads to spillover benefits who were not part of the orginal transaction.
(related to common property in that i.e. the manatees won't be harmed as often if someone own specific water-ways that they use)
"superior ownership"- a power given by the founding fathers to the government that allows them to take your home or business away from you, as long as it was for the purpose of serving the publice (military bases, highways, bridges and so forth)
the zero-sum game
involves the use of force or coercion to take property away from an individual of institution.
Want to see the other 12 Flashcards in Chapter 2: The economics of liberty?JOIN TODAY FOR FREE!