Ep8 "Why Capitalism Works" with John Cochrane
All Else Equal: Making Better Decisions
00:00
What's the Fairness Ointment?
In capitalism, there would be one consumer whowould wear the shoes. In a communist system, what would happen is, the government would take all the shoes and fairly distribute that pair to the 50 consumers. The willingness to pay is determined by two things: your need for shoes and how much money you have. On the other hand, richer people are willing to pay more for shoes than poorer people.
Transcript
Play full episode
