Thursday, 25 July 2013

The Sharing Economy

By Don Boudreaux

One of the political left’s most popular (the most popular?) trope is to complain that free markets promote and exacerbate economic “inequality” (where “inequality” is used as a synonym for “observed differences across people – or statistical categories of people – in some variable, usually pecuniary income or wealth, that we presume to be especially important”).

But what are too often overlooked are the many ways that markets spread economic benefits and costs and, in the process, promote greater economic equality than would otherwise exist.  The ways that markets promote this sharing of benefits or costs are numerous.  Here’s just one example: the real-world consequences of what economists identify as the “law of one price.”  This sharing works across geographic space and across time.

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