Professor Richard Wolff: Debunking the Magnitude of Markets: A Holiday Story

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by Richard Wolff.
Published on December 24, 2015


This article originally appeared at Truthout.org

Like all human institutions, markets have strengths and weaknesses. Born in particular historical conditions, they alter over time as conditions change, and eventually die. Just as other institutions - monarchy, slavery, empire, feudalism, tribal society etc. - were sometimes hysterically exalted, depicted as sublimely perfect and eternal, so too were markets. Yet as history produces, develops and extinguishes institutions, it does the same to their exaltations. As institutions lose bigger-than-life pretensions, their weaknesses become visible (and vice versa).

Markets were and are just one mechanism for distributing resources and products among people and enterprises. In markets, prices allocate scarce commodities to the highest bidders for them, to those who can pay the most. Markets differ from manyother, non-market mechanisms that human beings, past and present, have used for those distributions. Religious authorities, community elders, local or regional state authorities, democratically composed collectives, kinship and gift-based organizations developed different, non-market, price mechanisms for distribution. Because recent history exalted markets hysterically, it is time to expose their mixed and often horrific results.

Markets distribute resources and products by means of more or less voluntary, quid-pro-quo exchanges among owners of those resources and products. I offer so many of what I have and you want in exchange for so many of what you have that I want. Capitalism did not invent markets; they coexisted with all the non-capitalist production systems we know of (feudal, slave, individual peasant and so on). Likewise, those different production systems also coexisted with non-market distribution systems.

When capitalists exalted markets, they usually demonized socialism as if it ended markets (something actually existing socialists almost never did). The pre-capitalist slave economic system in the US South grew and spread by means of the markets in slaves as well as slaves' products. In contrast, the early centuries of European feudalism saw a constriction of markets far beyond anything associated with modern socialism. Later European feudalism made more use of markets. The actual history of markets differs from the more ideology-driven renditions of that history.

Despite the pro-market ideology that suffuses capitalist cultures today, inside those cultures markets are sometimes reviled in revealing ways. A typical holiday scene illustrates the point. Some individuals are hosting a dinner; they have purchased, cooked and served the food to friends and relatives gathered at a festive table. All in attendance receive and enjoy their portions, conversation bubbles and solidarity glows. As the meal concludes, one young man is asked to clear the table. He proudly applies the market exaltation brought home from that semester's college economics course. "Sure," he says to all at the table, "that will be $4, please." .............................(more)

http://rdwolff.com/content/debunking-magnitude-markets-holiday-story