For ten years, while I was Professor of Law at the University of Hull in North-East England, I lived in what is usually described as the old ‘market town’ of Beverley. Beverley does indeed have a market. The centre of the town is dominated by the old market square, going by the name of ‘Saturday Market’. And indeed today, as on every Saturday throughout the year, market stalls will have been erected and the casual shopper will be able to purchase a wide variety of goods, from fresh fruit and vegetables, through electrical and consumer good, to textiles and footwear – with lots of other things in between. People will come from the surrounding countryside, and in some respects the scene will not be that different from what it has been for hundreds of years. Markets such as this were usually established in the Middle Ages when the monarch granted the right to local noblemen (usually), so that people from something like a six-mile radius could purchase goods that would have been produced locally.
A ‘market’ in this sense (and in pretty much any other sense) is a place or an interaction where buyers and sellers of goods or services meet to agree a price for the transaction. It works best when there is ‘competition’, that is where there are several buyers and sellers, thereby assuring a reasonable rate for the exchange based on its objective value. Or put another way, a market is a distribution mechanism for goods and services, designed to ensure that the price is objectively reasonable.
As the analysis of trade became more sophisticated by the 17th and 18th centuries, the concept of a market acquired more and more significance in the emerging economic theory. The basis of modern market theory was in particular expressed by the philosopher Adam Smith, in his famous book An Inquiry into the Nature and Causes of the Wealth of Nations (1776), in which he argued that a free market was both the most efficient and also the most benign way of securing and sustaining prosperity.
In England supporters of the concept of free markets as an economic and political tool were by the 19th century styled ‘Liberals’, and in some contexts the label of ‘liberal’ still has that meaning. Indeed ‘liberal’ ideology not only pursued free market goals in economics and trade, but also in personal morality and conduct, as liberals disliked restrictions and regulations and taboos in these areas, thereby providing the bridge to what most people nowadays consider a ‘liberal’ outlook.
Not everyone was enthusiastic about markets as a form of liberalisation or even liberation. Hegel and Marx both were opposed to the free market concept – a particularly interesting critique of Adam Smith can be found in Marx’s Grundrisse der Kritik der Politischen Ökonomie (1861); although it might also be added that the concept of ‘market socialism’ emerged later in the 19th century.
By the 20th century – and the late 20th century in particular – the market had for some become a major ideology in the economics sphere. Markets were no longer just rational mechanisms for the exchange of goods and services, they were a mystical concept with opaque but unstoppable powers. The expression that you could not ‘buck markets’, which was popular in particular in the British Conservative government of Margaret Thatcher and in the writings of some of the high priests of the intellectual movement underpinning Thatcherism and Reaganism (particularly F.A. von Hayek), suggested that markets were not trading or policy devices but forces of nature. The ‘market’ became the God of the capitalist West, set against the ‘Evil Empire’ of the Soviet-style planned economy based on Marxism.
Of course all things must pass, and this particular form of market ideology did, too. And as the ideological battlegrounds of the Cold War disappeared from view after the fall of the Berlin Wall, the certainties of market ideology were also somewhat diluted.
Perhaps the early 21st century is a good time to re-assess markets. I have had a long interest in the idea and use of markets. It is arguable, for example, that you could trace the development of social policy through law by using market metaphors of supply, demand and distribution. And closer to my own current professional life, you could look at universities and education and ask whether markets can provide a useful tool for the development of policy. Furthermore, the restraint and regulation of markets is of major significance in almost all modern activities, and deserves close attention.
In other words, markets are not just locations (as in Beverley) or activities, but a market is also a metaphor for the analysis of policies, activities and conditions.
From time to time in this blog I shall develop this thinking a little further. This is a selfish activity, as I am working on a book on this general topic, and I am looking here for feedback and stimulation. So I am hoping for comments here. Maybe I also need to write a piece on plagiarism, so that I remember to give proper credit to any inspiration I may get.