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In order to provide an adequate answer for the essay question, we first have to analyse the meaning of the terms “free exchange between individuals” and “common good”.
A free exchange between individuals essentially means free unregulated markets, where the “invisible hand” of market forces will allocate the scarce economic resources with maximum efficiency. The common good is a concept of a different order, as it not only and not always implies the most efficient allocation of resources, but rather suck an allocation of resources that would benefit the society as a whole. ... Lutz defines it as “organi[sing] the social economy so as to allow its members to realise a common interest in the provision of certain basic goods to all members off community” .
Free markets are often unable to achieve this goal, and this is called market failure. This can happen for different reason, discussed below, and in such cases the free exchange between individuals does not take into account the social domain of economics – in essence, this means that when there is no or negative marginal benefit in providing a good or a service, markets will not supply them even if they are socially desirable.
Approximate Word count = 799
Approximate Pages = 3.2
(250 words per page double spaced)
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