I’m on my way to Nairobi for the Mont Pelerin Society meeting. Here’s my contribution: “Twenty Myths About Markets.” I’m happy to receive criticisms. (I can’t promise to answer them all, of course.) I’m not sure what will become of my scribblings; I may revise them for another venue, add data, etc., etc., etc. (This version is intended to stimulate thought, rather than being a scholarly or academic piece, so I deliberately avoided any use of footnotes or other scholarly apparatus.)
This is a very useful paper. I would like to use it in the classroom, if I may.
The point that is the hardest sell to me is the second to last. I think you (or the point you’re critiquing) conflate “utility maximization” with “market.” They are not the same thing at all. It also seems clear to me that all voluntary human interelations are mutually beneficial exchanges. There’s an important distinction between these broadly defined “markets” and a true catallactic market — which unfortunately we economists too often forget ourselves.
Anyway, great paper. I hope we all spread these ideas.
Number 6 seems to be numbered 7…
Very wide-ranging and thorough.
A couple more myths you could address:
* Piggybacking on #12, that markets necessarily exacerbate social tensions (“American Psycho”; “World on Fire”)
* Piggybacking on #14 and #16, that markets prey on those with purchasing power and poor or impaired judgment (children watching candy commercials; scams of senior citizens)
* Piggybacking on #13, but more nebulous: that living in a society with free markets leaves people adrift, alienated, without collective purpose (“American Psycho” again…most modern fiction, actually, and sociology; anxiety over outsourcing)
Thank you! These are very helpful. Naturally, I forbid anyone to use any idea that has ever occurred to me. (Just kidding! I’m flattered by the suggestion, Charles, and happy to oblige.)
Thanks, L.R. I’ve corrected the numbering problem. (I think!)
You missed one, Tom: “because markets are always regulated, we can’t come to any conclusions about free markets, since they don’t exist.” To which I say: http://blog.russnelson.com/economics/free-er-markets.html
Russell: interesting objection, and your response is good. I’d respond differently, though, as the objection seems utterly confused.
Free markets presume private property rights over the assets exchanged: the rights to exclusive use of assets, the rights to exchange assets, and the rights to enforce the terms of agreed-upon trades. These are prerequisites for a free market.
Where they exist, these prerequisites are usually defended by government…and if not, then by participants (“corporate structures”). Hence the objection “I’d love to know where they found a free market to have faith in. I’ve never seen one that wasn’t structured, biased or otherwise guaranteed by governmental or corporate structures”
This seems to me to be equivalent to saying that since property rights are restrictions on people’s behavior and markets can’t exist w/o property rights, free markets don’t exist.
It’s a bizarre argument, but the confusions in it are not surprising.
A corollary of it must be that only with completely open access common property can there be a free market — but in such case there is, of course, no market at all.
I agree that the objection is confused, but it’s a common one, and I’ll be sure to include it in some updated and improved version. Any other suggestions are gratefully received. Thank you!
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[…] (Atlas Global Initiative for Free Trade, Peace, and Prosperity). Còn 1 kì n?a Ngu?n: http://tomgpalmer.com/2007/02/24/twenty-myths-about-markets/ [i] D?ch t? mercantilism – chính sách coi tài s?n qu?c gia là nh?ng th?i […]