Microeconomics,, 16th Canadian Edition

(rishikesh) #1

Social Responsibility


In a free-market system, if you can pay another person to do things for
you, you may do so. If you persuade someone else to clean your house in
return for $75, presumably both parties to the transaction are better off
(otherwise neither of you would have voluntarily conducted the
transaction). Normally, society does not interfere with people’s ability to
negotiate mutually advantageous contracts.


Most people do not feel this way, however, about activities that are
regarded as social responsibilities. For example, in countries where
military service is compulsory, contracts similar to the one between you
and a housekeeper could also be negotiated. Some persons faced with the
obligation to do military service could no doubt pay enough to persuade
others to do their military service for them. Indeed, during the U.S. Civil
War it was common practice for a man to avoid the draft by hiring a
substitute to serve in his place. Yet today such contracts are usually
prohibited by law. They are prohibited because there are values to be
considered other than those that can be expressed in a market. In times
when it is necessary, military service is usually held to be a duty that is
independent of an individual’s preferences, wealth, influence, or social
position. It is felt that everyone ought to do this service, and exchanges
between willing traders are prohibited.

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