Are Transaction Costs Really Just Human Distance
From The Answer Is Transaction Costs by Michael Munger
March 24, 2026 · 43 min · Season 3 · Episode 21
About this episode
The episode connects Adam Smith's moral psychology to transaction costs, emphasizing the importance of understanding others in market interactions.
Send us Fan Mail We connect Adam Smith’s moral psychology to the modern idea of transaction costs and argue that the biggest frictions in markets start with the cost of understanding other people. We show how sympathy, propriety, self command, and reputation turn separate perspectives into workable cooperation and why justice is the real precondition for a stable commercial order. • why transaction costs always exist and why institutions matter when exchange is costly • a brief hi...
People in this episode
Host: Michael Munger
Topics covered
- transaction costs
- moral psychology
- market frictions
- cooperation
- justice
- commercial order
Keywords
- transaction costs
- Adam Smith
- moral psychology
- market frictions
- cooperation
- justice
- commercial order
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