The term 'market' conjures up street stalls for bakers, butchers and candlestick makers, the traditional once a week Market Day scene, with varied displays of goods shaded by awnings from sun or rain. From Farmer's to Common to Free to Fair, to Stock to Labor to Job; from Adam Smith's pencil factory to the computer assembly line, the assumption is that the market model fits a wide range of market settings and activities, as of course it does. But some businesses don't fit, yet they are considered markets just the same, and are privileged by the term. Put into Looking Glass lingo, the better to examine the contradiction, we must ask, when is a market not a market?
What is a market, anyway? Perhaps the simplest example is the corner lemonade stand, manned by a couple of budding pre-teen capitalists. Entry into this market usually needs little more than a hand lettered sign, a pitcher of fresh lemonade, glasses and a cigar box for the cash. Like all true markets, the sellers take risks and may face competition for customers from other drink stands. Barriers to entry are low; anyone with a couple of lemons and a little hope can enter the lemonade stand market. Consumers would then have a choice among different stands. Additionally, buyers know to beware, because few if any lemonade stands are regulated and even fewer are subsidized by the government or bailed out should they fail.
Contradictions occur when certain sectors of consumer goods and services are thought of as markets when they are not: crude oil, financials and health care are three types of commercial ventures for which the market model doesn't apply. We call these goods and services 'markets' at the risk of being thought disingenuous, or worse.
Few lemonade stands are vertically integrated, controlling the operations that find the raw materials, process them, and transport them to buyers, set the prices and control the supply. For consumers of oil, financial instruments and health care, there is no alternative except what is out there. Don't like the price of gas? Starting your own oil company or comparison shopping won't work. One takes what is available or does without.
An idealized, ideological geopolitical view:
The State Department view: "Market economies rest upon the fundamental principle of individual freedom: freedom as a consumer to choose among competing products and services; freedom as a producer to start or expand a business and share its risks and rewards; freedom as a worker to choose a job or career, join a labor union, or change employers.
also by Michael Watts, 2004:
Economic Insights From and About Literature, Drama, and Literary Criticism
An ecologist's view: "The market is in many ways an incredible institution. It allocates resource with an efficiency that no central planning body can match and it easily balances supply and demand. The market has some fundamental weaknesses, however. It does not incorporate into prices the indirect costs of producing goods. It does not value nature's services properly. And it does not respect the sustainable yield thresholds of natural systems. It also favors the near term over the long term, showing little concern for future generations. i.e., gasoline should be costing us $15 a gallon at the pump...[we] need to restructure tax systems by systematically incorporating indirect costs as a tax to make sure the price of products reflects their full costs to society and by offsetting this with a reduction in income taxes."
Lester Brown, Plan B 3.0 page 7
A Contradictionary view:
Consumers, workers (and anyone unable to usefully function as one or the other) are also free to sleep under bridges and starve, thanks to the willed blindness of the market economy philosophy. This is very much an ideology, contrary to what is written above. It doesn't merely join together market economies and political democracy -- it seeks to replace democracy with the market.
The free market died
But it remains unburied.
Corporations go through the motions.
In name only they compete
in order to privatize the gains
even as they socialize the costs.
The Free Market in Practice
Before the stock market slumped
Ahead of all the bail out programs
Did anyone suggest the free market wasn't really free?
I seem to recall people who cheerfully swapped credit card debt for sweat shop goodies.
Due deference was paid to the twin gods of Profit and Competition. The word was:
Everyone can get ahead if they just work hard
And keep their heads way, way, down.
Unfortunately, the freedoms that allow market economies to thrive, at least in economic textbooks, have been consistently abused by producers at the expense of the consumer and the worker. Over time, ideological thinking has cornered the market, hampering rational discussion of how to manage the glories of the free market when it runs off its rails. What this has meant in practice is socializing risks for producers (bail-outs at tax payer expense), while privatizing their gains (the return of the Gilded Age). Consumers are free to consume what they can afford, run up debt, or do without if their budgets won't stretch, as in covering health care, for example. Workers too are free to choose -- take a low paid job or remain unemployed.
While dirty, dangerous or difficult jobs are often incentivized by the prospect of high paychecks, there are glaring exceptions to this free market rule, especially within occupations practiced outside the public's view, as for example, agricultural labor, slaughterhouse work and mining. Only when the safety of the food supply is questioned, or another mine tragedy takes place does the need for better government regulation in these industries make headlines, but regulation is a contradiction to the notion of free markets. Slaughterhouse work, along with farm work, is a double disaster: low pay and high risk for health and safety, with 478.8 illnesses per 10,000 workers, for all animal slaughtering, except poultry. See Bureau of Labor Statistics Most Dangerous Jobs, where fishing and logging top the list as most life threatening, with average salaries among the lowest for all employment categories.
More contradictions: private contractors working in a war zone out-earn enlisted personnel many times over. This is explained on the basis of national defense being a 'public good' and therefore the private free market rules are gently suspended for the good of all.
Two views of one book about Franklin Roosevelt's Depression era administration and economic policies: THE FORGOTTEN MAN A New History of the Great Depression, by Amity Shlaes.
book review August 26, 2007 in the New York Times by David Leonhardt
book review, April 7, 2008, titled Hard Times, in The Nation by Kim Phillips-Fein
see also Time Magazine, November 11, 2016 Donald Trump and History's Competing Visions of America's 'Forgotten Man'