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Market competition, efficiency and economic liberty

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  • Michele Grillo

    (Università Cattolica del Sacro Cuore)

Abstract

This paper investigates efficiency and freedom as joint foundations of market economies. Whereas ideal perfect competition accommodates Mill’s principle of individual liberty in the economic arena, in real world, imperfectly competitive, markets economic freedom and efficiency appear often as conflicting values. Building on J. S. Mill’s utilitarian defense of free trade in On Liberty Chapter V, this paper puts forward a consequentialist defense of economic freedom under imperfect competition. Defense rests on the instrumental value of equal freedom, enjoyed by every market agent, as a source of general welfare in a world of dispersed information among unique human beings. The paper has a clear impact on contemporary antitrust debate, supporting neo-Brandesians’ rehabilitation of Structuralism in antitrust also on well founded, economic, i.e. efficiency, reasons.

Suggested Citation

  • Michele Grillo, 2023. "Market competition, efficiency and economic liberty," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 70(4), pages 437-456, December.
    • Handle: RePEc:spr:inrvec:v:70:y:2023:i:4:d:10.1007_s12232-023-00426-7
    DOI: 10.1007/s12232-023-00426-7
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    References listed on IDEAS

    as
    1. Novshek, William & Sonnenschein, Hugo, 1987. "General Equilibrium with Free Entry: A Synthetic Approach to the Theory of Perfect Competition," Journal of Economic Literature, American Economic Association, vol. 25(3), pages 1281-1306, September.
    2. John Vickers, 2005. "Abuse of Market Power," Economic Journal, Royal Economic Society, vol. 115(504), pages 244-261, June.
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    More about this item

    Keywords

    Market competition; Economic freedom; Efficiency; Mill; Antitrust normative grounds;
    All these keywords.

    JEL classification:

    • B10 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - General
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law

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