The Ethical Economics
Study Center



MODULE 4: The Ethics of Market Exchange

Textbook Reading:


Presentation Slides:


Additional Useful Information:

Haiti Faces an Ongoing Food Shortage
Aug 2022 - This segment on Here & Now discusses how gang violence in Haiti hinders the operation of markets and leads to food shortages.

Bernie Madoff, Steve Jobs, and Wall Street Greed - The American Magazine
About Wall Street greed.

Self-interest, without morals, leads to capitalisms self-destruction -
Why self-interest requires moral behavior.

A Friedman Doctrine -- The Social Responsibility of Business is to Increase its Profits - The NY Times
Reprint of Milton Friedman's 1970 argument about the principle role of business.



In this module we introduce several ethical principles that are implicitly assumed in the pure exchange model. These principles act as constraints on self-interested behavior and are needed to assure economically efficient outcomes in free markets. This section also introduces several policy issues including Milton Friedman's view on the social responsibility of business, common methods used to encourage ethical behavior, the role of intermediaries in markets, the case of high frequency trading of stocks and finally two market "success" stories that can be used to distinguish different types of income inequality.


Ethical Constraints in the Pure Exchange Model - 21 minutes

Defining Market Greed - 5 minutes

Milton Friedman on Shareholder Value - 7 minutes

Enforcement of Ethical Constraints - 9 minutes

Intermediaries - 8 minutes

High Frequency Trading - 8 minutes

The Trojan/Happy App Stories and Income Inequality - 4 minutes