Market (economics)

Empirical methods Prescriptive and policy Heterodox In economics, a market is a composition of systems, institutions, procedures, social relations or infrastructures whereby parties engage in exchange.

Markets generally supplant gift economies and are often held in place through rules and customs, such as a booth fee, competitive pricing, and source of goods for sale (local produce or stock registration).

As an analogy, such an argument may suggest that capitalists do not want to enhance the structure of markets, just like a coach of a football team would influence the referees or would break the rules if he could while he is pursuing his target of winning the game.

He is accustomed to be of use in this way to his neighbours, who reward him in the same manner with cattle and with venison, till at last he finds it his interest to dedicate himself entirely to this employment, and to become a sort of house-carpenter.

It began in the 19th century debates surrounding the works of Antoine Augustin Cournot, William Stanley Jevons, Carl Menger and Léon Walras—this period is usually denominated as the Marginal Revolution.

This set of ideas gave way to what economists call perfect competition—now found in the standard microeconomics texts, even though Marshall himself was highly skeptical it could be used as general model of all markets.

[28] C. B. Macpherson identifies an underlying model of the market underlying Anglo-American liberal democratic political economy and philosophy in the seventeenth and eighteenth centuries: persons are cast as self-interested individuals, who enter into contractual relations with other such individuals, concerning the exchange of goods or personal capacities cast as commodities, with the motive of maximizing pecuniary interest.

[31] This tradition is continued in contemporary neoliberalism epitomised by the Mont Pelerin Society which gathered Frederick Hayek, Ludwig von Mises, Milton Friedman and Karl Popper, where the market is held up as optimal for wealth creation and human freedom and the states' role imagined as minimal, reduced to that of upholding and keeping stable property rights, contract and money supply.

[34] Paul Dulaney Converse and Fred M. Jones wrote:[35] Market distribution includes those activities which create place, time, and possession utilities.

[39] Koichi Shimizu proposed a 7Cs Compass Model (corporation, commodity, cost, communication, channel, consumer, circumstances) to provide a more complete picture of the nature of marketing in 1981.

Robert F. Lauterborn wrote about the Four P's in 1990[40] When Jerry McCarthy and Phil Kotler proposed their alliterative litany – Product, Price, Place and Promotion – the marketing world was very different.

Roaring out of World War II with a cranked-up production system ready to feed a lust for better living, American business linked management science to the art of mass marketing and rocketed to the moon.

Mass media simultaneously taught consumptive culture and provided advertisers with efficient access to an audience which would behave, Dr. Dichter assured us, perfectly predictably, given the proper stimulation.He instead advocated a four Cs classification which is a more consumer-oriented version of the four Ps that attempts to better fit the movement from mass marketing to niche marketing: Max Weber defines the measure of rational economic action as the:[41] Opposition of interests is typically resolved by bargaining or by competitive biding: Money may classified as: Weber defines: Weber defines "formal rationality of economic action" to designate the extent of quantitative calculation or accounting and "substantive rationality" as the degree a group of persons is or could be adequately provided with good by means of oriented course of social action.

The pursuit of money and earthly goods was not viewed positively by Protestantism, the Puritans however emphasized that God blessings, like in the Book of Job, applied also to material life.

[47] Michel Callon's concept of framing provides a useful schema: each economic act or transaction occurs against, incorporates and also re-performs a geographically and cultural specific complex of social histories, institutional arrangements, rules and connections.

However, as Timothy Mitchell points out this mode of thought tends to put aside the real, the natural and nonhuman: the idea that a universal processes exists such as modernity, capitalism and globalization should not be taken for granted.

Another part of the population, namely that which is engaged in wholesale commerce, the various professions of Art and Science, and that which consists of merchants and officials, lives collected in towns.Transportation can be carried either by stone-paved roads or railways, the former not being fully developed by private capital alone.

A widespread trend in economic history and sociology is skeptical of the idea that it is possible to develop a theory to capture an essence or unifying thread to markets.

[56] Helpful here is J.K. Gibson-Graham's complex topology of the diversity of contemporary market economies describing different types of transactions, labour and economic agents.

[58] Bronisław Malinowski's path-breaking work, Argonauts of the Western Pacific (1922), addressed the question "why would men risk life and limb to travel across huge expanses of dangerous ocean to give away what appear to be worthless trinkets?".

The manufacturing centres of important articles, such as pottery, stone implements, canoes, fine baskets, valued ornaments, are localised in several places, according to the skill of the inhabitants, their inherited tribal tradition, and special facilities offered by the district; thence they are traded over wide areas, sometimes travelling more than hundreds of miles.

They bring pottery and shell ornaments, in olden days, stone blades, to Gulf Papuans, from whom they obtain in exchange sago and the heavy dug-outs, which are used afterwards by the Motu for the construction of their lakatoi canoes.The economic situation can vary considerably depending on the tribes and islands: for example the Gumawana villagers are known as efficient sailors and for their skill in pottery, they are, however, island monopolists keeping the trade in their own hands without improving it.

But the word "trade" is used in current Ethnography and economic literature with so many different implications that a whole lot of misleading, preconceived ideas have to be brushed aside in order to grasp the facts correctly.

Thus the aprioric current notion of primitive trade would be that of an exchange of indispensable or useful articles, done without much ceremony or regulation, under stress of dearth or need, in spasmodic, irregular intervals—and this done either by direct barter, everyone looking out sharply not to be done out of his due, or, if the savages were too timid and distrustful to face one another, by some customary arrangement, securing by means of heavy penalties compliance in the obligations incurred or imposed.

Sociologically, though transacted between tribes differing in language, culture, and probably even in race, it is based on a fixed and permanent status, on a partnership which binds into couples some thousands of individuals.

As to the economic mechanism of the transactions, this is based on a specific form of credit, which implies a high degree of mutual trust and commercial honour—and this refers also to the subsidiary, minor trade, which accompanies the Kula proper.

Finally, the Kula is not done under stress of any need, since its main aim is to exchange articles which are of no practical use.In the 1920s and later, Malinowski's study became the subject of debate with the French anthropologist, Marcel Mauss, author of The Gift (Essai sur le don, 1925).

[60] He argued these gifts were a "total prestation" as they were not simple, alienable commodities to be bought and sold, but like the "Crown jewels" embodied the reputation, history and sense of identity of a "corporate kin group", such as a line of kings.

Based on an improved translate, Jonathan Parry has demonstrated that Mauss was arguing that the concept of a "pure gift" given altruistically only emerges in societies with a well-developed market ideology.

Although arithmetic has been used since the beginning of civilization to set prices, it was not until the 19th century that data was systematically collected and more advanced mathematical tools began to be used to study markets in the form of social statistics.