Equality of Resources, Risk and the Ideal Market
2010 (English)In: Arbetarrörelsens forskarnätverk, 10 April 2010, 2010Conference paper (Other academic)
According to Ronald Dworkin, mimicking the ideal market from equal starting points is fair.This paper spells out the implications of taking the ideal market seriously for equality ofresources. The ideal market is described by neoclassical economics, in which certaintyreigns. There are no choices under risk in such a market. Therefore, there is no such thingas option luck in the ideal market. Consequently, when mimicking this market we cannotand should not hold people responsible for option luck. Moreover, mimicking this marketimplies that we ought to set up a social safety net, since rational individuals with perfectforesight would see to it that they always have sufficient resources at each point in life.Furthermore, the idea of insurance is incompatible with the ideal market. This suggeststhat insurance cannot play a fundamental role in equality of resources. This opens up thequestion of whether the goals of the insurance thought experiments in equality ofresources would be better served by some other mechanism, such as the willingness topay method.
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IdentifiersURN: urn:nbn:se:kth:diva-14252OAI: oai:DiVA.org:kth-14252DiVA: diva2:331900
QC 201007282010-07-282010-07-282010-07-28Bibliographically approved