Responsible Commerce

1. Sen believes that the market is valuable both for the freedom it provides and for the results it delivers. Give examples of each. Which is the more important rationale for capitalism- freedom or efficiency?

The market is valuable because it sets the demand and supply, which tempers the pursuit of self interest. As a result of competition, companies have to have adequate and fair prices in order to solve the law of supply and demand. The success of East Asian economies in the recent decades shows the result of capitalism of market. It is freedom because the market is free from government intervention. How goods, services and labor may be used, priced, or distributed are not regulated by the government. The company has all the control over the labour, the pricing and how it performs its business. The government’s roles are limited to limited to tax collection, and enforcement of private ownership and contracts. Examples of freedom include the company set a price to compete with competitors. An example of the results it delivers is the rise of the Japanese despite the long period of recent recessions and financial turmoil.

2. Gives your own examples of the efforts of interest groups to restrict market competition for their own benefit. What point does Vilfredo Pareto make in this context? What factors determine whether an interest group succeeds in protecting itself from competitions?

Efforts of interest groups preventing market competition includes restrictive dealing, price fixing, refusal to do business with a certain vendor, resale price maintenance which resellers are not allowed to set prices independently and typing of non related products to be purchased together.

He is trying to say that political influence have a great impact on the economic gain of the world. Company will sacrifice for the employee to gain more profits.

In order for the success in protecting itself competitions, companies must be able to cooperate with one another and...