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If a Pure Market Economy Is So Good, Why Doesn't It Exist? The Importance of Changing Preferences Versus Incentives in Social Change

  • The Quarterly Journal of Austrian Economics
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07/30/2014Edward StringhamJeffrey Rogers Hummel

Volume 13, Number 2 (Summer 2010)

 

Many economists argue that a pure market economy cannot come about because people will always have incentives to use coercion (Cowen and Sutter, 2005; Holcombe, 2004). We maintain that these economists leave out an important factor in social change. Change can come about by altering incentives or preferences, but since most neoclassical economists ignore changing preferences, they too quickly conclude that change is impossible. History shows that social change based on changes in preferences is common. By recognizing that preferences need not be constant, political economists can say much more about changing the world.

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Contact Edward Stringham

Edward Stringham is Davis Professor of Economic Organizations and Innovation at Trinity College in Hartford, Connecticut. In 2017 he became president of American Institute for Economic Research in Great Barrington, Massachusetts. He received his undergraduate degree from College of the Holy Cross in 1997 and his doctorate from George Mason University in 2002. As a student, Stringham first attended Mises University in 1996.

Contact Jeffrey Rogers Hummel

Jeffrey Rogers Hummel is a professor of economics at San Jose State University. Send him mail.

Cite This Article

Stringham, Edward P., and Jeffrey Rogers Hummel. "If a Pure Market Economy Is So Good, Why Doesn't It Exist? The Importance of Changing Preferences Versus Incentives in Social Change." The Quarterly Journal of Austrian Economics 13, No. 2 (Summer 2010): 31–52.

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