My Blog List

Sunday, November 18, 2012

The Market is not a person

A market is a place. Talking about the market one might as well be talking about the streets, the parks, a waste dump. It's not "the market" that sets the prices for things, or the market that moves up and down. It is human policy and human behavior. It may be legitimate to use the phrase as a short cut to saying that "the majority of investors bid up prices today," or employers calculate that they will make a certain amount of money if they pay such and such a price. Theorists like to say that economic formulas indicate that marginal supply = marginal demand at the equilibrium price. But that is abstraction. It is a logical error to confuse abstractions with persons. In the real world equilibrium are at best transitory and the only time a system is at rest is when the system is dead. Markets are a place. The players in a market are playing in a system of human relations, in which markets are one abstract element. The market doesn't decide anything. The people in that market, acting as members, in context of power and possession, do. Essentially they are collective entities

Thus Market government can be oligarchy, monarchy, republican or it can even be almost democratic. Governments are power constrained. Those who claim that "the market" is a being that determines prices is either a liar, a shill, or expressing his theology about who God is for him/her.

No comments:

Post a Comment