Mark Norwoods

Professor Oberdick

ECON 205

April 12, 2020

The Elements of Capitalism

1. According to Gaus, under pure capitalism, the range of private property as well the

bundle of rights this involves should be “maximal.” What does this mean, and do you

agree with it? Do people own themselves, and does this imply that they should be able

to sell themselves into slavery? Should they be able to sell their body parts? Should they

be able to sell their labor as sex workers?

What maximal means under pure capitalism, it refers to the range of private property and

bundle of rights being large and extensive for those who own private property. I agree with

Gaus’ account of the range and bundle of private property and their rights, because you own

the property and have the right to say what happens to your property. People do inherently

own themselves and their bodies. Regarding selling yourself into slavery, I do not believe

that you should be able to sell yourself to be owned by another person. You should be able

to sell your labor or services to anyone that is willing to pay for them. Also, I do think that

people should be able to sell body parts. For example, if someone is far down on the waitlist

for a kidney transplant but I am a match, I feel like it is my right to be able to sell one of my

kidneys because it is benefiting both parties involved. In my opinion, sex work should be

legal. People own their bodies and have the right to do what they’d like with it. If they are

selling a specific service with their body they should be able to do so.
2. Explain the polysilicon factory examples. How do tradeable property rights lead to an

efficient allocation of resources in the first example, where pollution is legally permitted?

And how do they lead to an efficient allocation in the second example, where pollution is

legally prohibited? And how is this connected to the idea that government intervention

isn’t necessary for avoiding problematic externalities? (For these examples see

especially p. 10-12 of the pdf of “The Idea and Ideal of Capitalism” and the lecture video

on markets, the 2nd element of capitalism.)

Waste is either stored or released into the environment after minimal processing into local

agricultural farms. In the first polysilicon factory example, where pollution is legally

permitted, both parties can collectively allocate resources through incurring the one-time cost

of 500,000 building the storage facility. If pollution cost the farmers 40,000 per year, they

save paying 25,000 per year assisting in the storage facility. In the second example, where

pollution is illegally prohibited, the farmers can sue the factories for polluting. The factories

would have to pay the farmers over the 40,000 per year to make them not want to sue. Which

would be better for both the farmers and the factories. Both parties working together to avoid

government intervention.