Voluntary exchange

Voluntary exchange is the act of buyers and sellers freely and willingly engaging in market transactions. Moreover, transactions are made in such a way that both the buyer and the seller are better off after the exchange than before it occurred.

Voluntary exchange is also a fundamental assumption made by neoclassical economics. That is, when neoclassical (mainstream) economists theorize about the world, they assume voluntary exchange is taking place. Building on this assumption, mainstream economics goes on to conclude a variety of important results, e.g., that market activity is efficient, that free trade has net positive effects, and that markets in which economic agents participate voluntarily make them better off. Notably, mainstream economists, having made the assumption of voluntary exchange, have thus defined away the possibility of finding exploitation. Marxist economists, one of the major alternatives to neoclassical economics, simply assume exploitation. Thus it can be said that economics broadly cannot objectively test for the existence of exploitation of one party or group by another. This is arguably a major failure of the discipline.