On Free Exchange in Trade
This one will be rather short (well maybe not), but I was thinking about this more and more recently and wanted to get my thoughts down on some electrons while the idea was fresh.
When talking about economic transactions, one often hears the story of the two gentlemen who, without any coercion on either's part, come to an agreement. The buyer agrees to pay $X for a widget sold by the seller. Both men are ostensibly "better off" for the deal, which becomes a point for increasing free trade.
I suppose that both men are "better off" from their own point of view, but what about from an objective point of view? Is there even a way to objectively measure this? I'm bold enough to say there is!
Using a continuum, we can "visualize" the price at which a buyer would buy a good or service and at which the seller would provide the good or service. So long as their pricelines match somewhere, they will come to an agreement. I'll switch terminology and say that both are equally "worse off" if the area of overlap on the priceline is bisected; at this bisection is the objective "worse off" point. This would be the point at which neither person is, comparatively speaking, better/worse off than the other.
I'll also talk a bit about fairness here, too. This point of objectivity is also the most fair price point at which a good or service could be sold. Being that I'm still a philosophical liberal, I enjoy government intervention on behalf of whomever is getting the more raw deal. Nine times out of ten the seller, because he has a greater reserve of capital, can afford to be more discriminating than the buyer, which is why I support any government efforts (done within constitutional parameters, mind you) to level the playing field as it were.
Now this is under complete information assumptions. Under incomplete information assumptions a different definition of "objective" occurs. The "you paid WHAT for that?" is the very trival (and fuzzy) benchmark for objectivity there. Veblen comes to mind as well when thinking about objectivity.
What say you?