Fallacies of Capitalism 15: The Voluntary Transactions of Actors in an Economy

A voluntary transaction refers to an economic exchange between two or more parties where each party willingly participates without coercion or external pressure. In a voluntary transaction, individuals are assumed to engage in the exchange because they perceive it to be mutually beneficial, based on their own preferences and subjective judgements of value.

However, the "voluntary transactions" fallacy arises when this concept is applied without considering the power imbalances and information asymmetries that can exist in real-world market transactions. While voluntary transactions are a foundational concept in market economics, it is important to recognise that not all transactions occur under ideal conditions of equal power and perfect information. Here are some additional points to consider:

1. Power imbalances: In many transactions, there can be significant disparities in bargaining power between the parties involved. For example, in labour markets, workers may face limited employment options and economic pressures, while employers may have more leverage in determining wages and working conditions. These power imbalances can influence the outcomes of the transaction, potentially leading to exploitation or unfair terms.

2. Information asymmetry: In voluntary transactions, it is assumed that both parties have access to complete and accurate information about the goods, services, or conditions involved. However, in reality, information can be unevenly distributed between buyers and sellers. Sellers may possess superior knowledge about the product, its quality, or potential risks, while buyers may lack access to the same information. This information asymmetry can undermine the notion of fully informed and voluntary choices.

3. Coercive pressures: While voluntary transactions should be free from coercion, individuals can face external pressures that limit their choices and compromise their ability to make truly voluntary decisions. These pressures can include economic necessity, social or cultural expectations, or systemic inequalities. For example, individuals may accept low-paying jobs or unfavourable contracts due to limited alternatives or the need to meet basic needs.

4. Market failures: The assumption of voluntary transactions fails to account for market failures, such as externalities or the undersupply of public goods. Externalities occur when the actions of one party impose costs or benefits on others who are not involved in the transaction. Market failures can result in suboptimal outcomes, where voluntary transactions do not account for the broader social or environmental impacts.

By considering these factors, it becomes clear that the "voluntary transactions" fallacy oversimplifies the complexities of real-world market interactions. Recognising the existence of power imbalances, information asymmetries, and other limitations is crucial for understanding the potential consequences of market transactions and designing policies that promote fair and equitable outcomes.

Neoliberalism is killing our love lives

Dependency and power imbalances brought on by capitalist financial insecurity are the enemies of true romance writes Bhaskara Sunkara in The Guardian


 

A broken heart drawn by a patron is shredded at Bottom Line, a bar and dance place in downtown D.C., which invites people to come and shred photos and cards from ex-spouses and lovers in honor of Valentine’s Day. 


For many of us, Valentine’s Day is a reminder that our love life sucks. Maybe we just had an unhappy end to a relationship, maybe we’re struggling to keep alive an existing one. For those of us, the conventional advice we receive is drab and unconvincing. Sure, having a regular date night to “keep the love alive” is just fine, I suppose. But if you really want to get the sparkle back, why not engage in a militant class struggle this Valentine’s Day instead?

You see, countries with powerful working-class movements tend to have more social rights and guarantees. And those protections can make your love life a lot less stressful.

Most Americans feel overwhelmed by their financial obligations, and it’s the leading cause of friction in relationships. That’s no surprise in a country where life is so precarious – where a trip to the hospital, a layoff, or shifts in the housing market can change everything. We’re overworked at our jobs and underpaid. Powerless to bargain for a better deal from our bosses, we zero-in on our partners’ spending habits or priorities instead.

Our financial insecurity also keeps us unhappily wedded to relationships we should leave. The median wage for a worker in the United States is $857 a week before taxes – most of us would struggle to take care of children on one income. For women, shouldering most of the burden of unpaid household work and dealing with workplace pay disparities, the situation is especially bad. What’s more, a quarter of women under 64 get their health insurance from their spouse’s plan. Loving marriages can be wonderful, but dependency and power imbalances are the enemies of true romance. 

Things don’t have to be like this. And we needn’t imagine what a better alternative looks like – it already exists, just not here. A century ago, life in Scandinavia was just as cutthroat as it was in the United States. A 1902 New York Times articles describes Sweden as “the most feudal and oligarchical country in Europe” – only rivaled by Tsarist Russia. Contemporaries called the country an “armed poorhouse”. But, over time, capitalism in the region was humanized by socialists and trade unionists. Working people joined vast labor confederations to collectively demand higher wages and shorter workdays from their employers. They also joined new parties set up to fight for the interest of regular people in government.

As well as more fairly distributing income for workers, the system allowed people to meet their basic needs outside the workplace. Even at the peak of social democracy, life wasn’t perfect, but the changes were especially profound for women. Child allowances, family leave, child care, even the provision of school meals – all eased the pressures placed on them by society. Beyond such legislation, the principle of “equal pay for equal work” and industry-level trade union bargaining favored sectors that disproportionately employed women.

During the 1960s in Sweden, still not content with the progress toward sexual equality, the governing social democrats and feminists took steps to generate policy that encouraged “free development” for women, challenged traditional sex roles, and expanded abortion rights. Despite rollbacks to its welfare state, the country is still one of the most equal in the world (and parents there are still entitled to 480 days of paid parental leave, compared to zero days in most of the United States).

Kristen R Ghodsee, in her book Why Women Have Better Sex Under Socialism, observes a similar phenomenon in the Eastern Bloc. “Women [had] no economic reason to stay in abusive, unfulfilling, or otherwise unhealthy relationships” in countries where state guarantees meant that “personal relationships could be freed from market influences.” Of course, states like East Germany and Czechoslovakia were marked by political repression. But the experience of European social democracy shows that the same positives can be achieved in a far more liberal political environment.

And yes, as far as Ghodsee’s book title goes, there is proof that more secure people have better sex and are more sensitive lovers.

Will all these protections cure heartache? Are all your relationship woes rooted in economic anxiety? Absolutely not. But by organizing collectively, we can become more empowered as individuals. And when strong, free individuals decide to love they make for better partners.

The Unfairness of the Switch Hit

Why aren't more bowlers complaining about the switch hit?

The stroke is patently unfair and widens the imbalance between bat and ball

Ian Chappell

May 20, 2012

In my playing days I believed many Englishmen used to unnecessarily complicate what was meant to be a reasonably simple game. It looks like that habit has now spread. 

I can't imagine a more complicated solution to control the switch-hit phenomenon than what the ICC is considering. Complex changes to the lbw law regarding what is a batsman's leg side and analysis of the risk-reward ratio of the shot to see if it disadvantages the bowler are two such proposals. Without watching another ball bowled, I can tell you the answer to the second suggestion: the switch hit is patently unfair to bowlers.

If a bowler, having already told the batsman (via the umpire) how he's going to propel the ball, places his field for a right-hander and ends up delivering to a left-hander, how can that be fair? It's possible to reach a more equitable arrangement dealing with the mafia.

One of the critical duties of an administrator is to ensure the contest between bat and ball remains balanced, like an evenly weighted see-saw. The switch hit is a hefty dad on one end with his five-year-old son, feet dangling in mid-air, on the other.

A simple law that states, "Having taken up his stance, a batsman may not change the order of his feet or hands in playing a shot", would ensure balance is restored.

With the fielding positions still effective, let the batsman play the reverse sweep, the scoop or whatever other innovative premeditated shot he dreams up and any self-respecting bowler will feel the odds are in his favour. The reverse sweep does not defy the proposed law above because the top and bottom hands remain exactly that on the handle.

If the ICC wants real proof of any disadvantage then let the bowler not have to tell the batsman from which side of the wicket he's going to deliver. When the bowler swaps from over to round at his pleasure, see how long it is before batsmen are bleating. In fact, the umpires would probably be the first to call for a truce.

In addition to disadvantaging the bowlers, the switch hit could unfairly help the batting side win a tight Test match. By swapping at the last moment, a batsman could induce a no-ball under the maximum-two-fieldsmen behind-square-leg law to gain victory without hitting the ball or the bowler knowingly doing anything illegal.

	One of the critical duties of an administrator is to ensure the contest between bat and ball remains balanced, like an evenly weighted see-saw. The switch hit is a hefty dad on one end with his five year-old son, feet dangling in mid-air, on the other

I've championed the cause of bowlers over the years, as the major innovators in the game, and I'm staggered they have been so timid in this debate. Whatever happened to the spirit of those revolutionaries John Willes and Ned Willsher, both of whom played a role during the 19th century in upgrading bowling from underarm (via sidearm) to the modern over-arm delivery?

I'm surprised no modern-day bowling revolutionary has tried swapping alternate deliveries from over and round the wicket until the officials enquired, "What's your problem?"

As a part-time leggie and a baseball catcher in my younger days, I would have seriously considered letting a batsman have it with a well-directed throw if he changed the order of his hands or feet while I was running in to bowl. I've no doubt Wills and Willsher would adopt more subtle methods, but I'm sure they would have admired my zeal in attempting to get my point across.

I'm often told the switch hit should be allowed because it's legal in baseball. That's nonsensical because in baseball the hitter has to stand in either the left- or right-hand batter's box, so the pitcher knows beforehand what he's facing and can adjust his field accordingly. And late in a close game the opposing manager will call on either a right- or left-handed pitcher in order to exploit the switch hitter's weaker side.

There's no doubt the switch hit requires a hell of a lot of skill, and it's exciting when Kevin Pietersen or David Warner clubs a six while quickly swapping from one style of batsman to another. Skilful yes, fair on the bowlers no, and it's the approval of such imbalances between bat and ball that can lead to things like chucking and ball-tampering, or at the very least on-field animosity.