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Zachary_Kurtz comments on Money pumping: the axiomatic approach - Less Wrong
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But what do you mean by "fair trade" here. It's not like any party didn't know what the deal was. This just means there's something else at play which was determining the value of the goods to both participants. What is "unfair" about this type of exchange?
Well, if you're going to assume that any deal which seems unfair to a mere outsider will have 'something else at play' rendering the deal actually fair, then there's nothing I can say about that. Such assertions are like that of the Austrians - no mere evidence can falsify it. (After all, who knows what evil lurks in the hearts of men? Er, I mean, differing preferences.)
Well the Austrians are right in that the traditional assumptions of rationality (and therefore fairness) don't make much sense.
Although I think the behavioral economists are doing a decent job of backing up these type of assertions: the point that "fairness" is subjective.
Can someone engage in a trade they don't believe is fair? Yes of course.
But if both parties say a trade is fair, who is an outside observer (with all the market data in the world) to tell them otherwise?
"Fairness is not agreement, fairness is symmetry."