Altruism and social entrepreneurship - towards a theory of non-market organizations

Almost all of us sometimes voluntarily give up some scarce resources to make someone else better. Not only the amount of resources used for such purposes, but also other wider concerns (implications for private and government sector) have drawn the attention of economists in recent decades. In this paper I develop a theoretical framework underlying such activities, which can be in short termed as "altruistic". To do so, I first explain the notion of "altruism", as can be found in the works of Adam Smith, Gary Becker and Ludwig von Mises. On these grounds, we can say that by voluntary altruistic transactions the utility of both sides of the transaction has been increased. The main differences between the market and non-market sectors are described and the concept of "social entrepreneurship" is developed. The analysis is concluded by application of this theoretical framework to the case of altruism as a "public good".