The market - a solution to what? Part 2

In part 1, I explored the nature of 'the market'. The word is ubiquitous but often quite vague.

So far, I have clarified 'the market' is a process for allocating resources for humans. The economy is very complex, so some simplifying ideas are essential: 'the market' simplifies ideas about the world into 'things', 'ownership' and 'utility (use value)'. 

When an old meme is perfect. Source

Knowing that, I want to explore the idea of a 'market-based solution'. To the problem of ensuring enough apples and turnips to meet the food needs of people, it seems reasonable. But for the problem of ensuring clean air for people to breathe, I can't see that as a matter of 'things', 'ownership' and 'utility'. 

So how does the market provide a solution? To answer this, I need to delve into how 'the market' process functions and how it measures success and failure.

Now, a warning: this exploration involves some nerdy, abstract, and perplexingly vague economic words. My focus, however, is not economics jargon, but the ideas about the world that economics relies on to explain the way 'the market' works. 

Economics¹ can make you feel confused and lost, but my suspicion has always been that it is deliberately opaque. So, stay with me!

In fact, as you're about to read, it is downright strange and scary.

From Mark Twain

Wordly Inspiration from the immortal Mark Twain (well, a bit dated with his use of 'man') for those days when you feel your writing is derivative:

"The kernel, the soul — let us go further and say the substance, the bulk, the actual and valuable material of all human utterances — is plagiarism. For substantially all ideas are second-hand, consciously and unconsciously drawn from a million outside sources, and daily used by the garnerer with a pride and satisfaction born of the superstition that he originated them; whereas there is not a rag of originality about them anywhere except the little discoloration they get from his mental and moral calibre and his temperament, and which is revealed in characteristics of phrasing. When a great orator makes a great speech you are listening to ten centuries and ten thousand men — but we call it his speech, and really some exceedingly small portion of it is his."

See more Wordly Inspiration.

The market - a solution to what?

I've been thinking about the market lately. Not the local market where I buy fruit and vegetables, chat with the growers about conditions on the farm, see a few people I know, and maybe watch a busker.

See you there Mr Bean! Source

It's this market I hear endlessly about: the energy market needs major revamp; the chief executive has reassured the market; there is no true market for overland flow licences; an Australia-wide view of the aged care market; reform our broken housing market; the labor market added around 242,000 jobs for the month.

So many people seem enamoured with this amazing thing called the market and 'fixing the market' or 'finding a market solution' when we discuss numerous diverse aspects of our society - electricity supply, airline viability, water, aged-care, housing, finding a job. 

But just what is the market? It seems big and ubiquitous, but strangely vague. It's obviously not a place, like my local market. So, what kind of thing is it?

And what makes the market the solution to all sort of pressing social and environmental issues?

TATKOP 126

If you're a new follower, welcome to my monthly exploration of dichotomies: the TATKOP series.

There Are Two Kinds Of People: those who 'want it fixed right now!' and those who know there is no 'fix' to many problems. (I've worked for some of the former.)

 

See more in the TATKOP series.