A market is the institution that coordinates the production and distribution of goods and services through prices rather than through command or custom. Ronald Coase's account of the firm treats the market and the firm as two alternative modes of coordinating economic activity: outside the firm, price movements direct production, coordinated through a series of exchange transactions on the market. Sociologists dispute how self-regulating markets actually are: Karl Polanyi's concept of embeddedness distinguishes a society where market exchange is only episodic from one where it permeates every expression of life, and treats the fully self-regulating market as itself a historically specific social construction rather than a natural baseline state. This description is adapted from Wikipedia contributors under CC BY-SA 4.0; changes were made. https://creativecommons.org/licenses/by-sa/4.0/
Facts
Disputed
Emergence PeriodMarkets in some localized, socially embedded form are documented across a wide range of historical societies; what is debated is not their antiquity but Karl Polanyi's claim that the fully self-regulating, disembedded market society of nineteenth-century industrial capitalism was a specific and recent historical development rather than the natural expression of a universal human propensity to trade. 1 Sourced to the subject's own accountDebated because it turns on how far exchange in early and non-industrial societies should be read as market behavior at all, not on any disputed date. Institution TypeSourced to the subject's own accountEconomic institution: a price-based coordinating mechanism for exchange, contrasted sociologically with non-market institutions, such as the guild, kin-based reciprocity, and state redistribution, that coordinate the same underlying activity through other means. 1 Connections
Associated With
Barter exchange has historically taken place within marketplaces alongside monetized trade, especially in economies with limited currency circulation.
Homans social exchange theory modeled everyday social interaction on an economic logic of costs and rewards similar to market exchange.
White markets from networks theory modeled producer markets as social structures in which firms watch and position themselves against their nearest competitors.
Marine insurance grew directly out of the trading markets of early modern port cities, where merchants pooled risk against the loss of cargo and ships.
Knorr Cetina ethnography of global financial markets analyzed them as technologically mediated systems in which traders act on a shared, screen-based reality.
Polanyi The Great Transformation argued that the market economy is always embedded in, and made possible by, wider social and political institutions rather than a natural, self-regulating order.
Granovetter embeddedness theory reframed markets as structured by ongoing social networks and relationships rather than atomized rational exchange.
Callon studies of market performativity argued that economic theory does not merely describe markets but actively helps construct how they operate.
Source Wikipedia: Property
Source Roberto Mangabeira Unger (Wikipedia)
Guilds historically regulated entry into craft markets, one of several non-market and quasi-market mechanisms alongside price-based exchange.
Source Wikipedia: Guild
Historically, guilds regulated who could produce and sell a given craft or trade good, controlling entry to and competition within a market rather than existing independently of one.
Studied By
Source Benjamin Tucker (Wikipedia)
Source Encyclopedia.com: Karl Polanyi
Source Wikipedia: Neil Fligstein
Sources
1. Wikipedia: Market (Economics)
WikipediaDefinition section
Outside the firm, price movements direct production, which is co-ordinated through a series of exchange transactions on the market.
- In Category: Institutions and Social Structures
View the Source Wikipedia: Guild
Wikipedia: Property
Encyclopedia.com: Karl Polanyi
Encyclopedia.comStudied By: Karl Polanyi, Article textQuote, Studied By: Karl Polanyi, Article text
In the capitalist, market-integrated economy and in conventional economic theory, the two meanings of “economic” are fused, since in capitalism the market institutions serve both to provide the material means of existence and to enforce economizing activities on the participants: to earn their livelihood people must abide by the rules of the market.
Wikipedia: Neil Fligstein
Studied By: Neil Fligstein, Article textQuote, Studied By: Neil Fligstein, Article text
Fligstein has developed a “political-cultural” approach to market analysis, arguing that markets are social and political arenas shaped by actors’ conceptions of control, state regulation, and institutional structures.
Benjamin Tucker (Wikipedia)
Studied By: Benjamin Tucker, Article textQuote, Studied By: Benjamin Tucker, Article text
But under system of a free market without state monopolies and privileges, which he believed to, among others, prevent zero-interest loans from being accessible to the workers, the capitalists would have a right to suppress aggressive strikers.
Roberto Mangabeira Unger (Wikipedia)
Associated With: Roberto Mangabeira Unger, Lead sectionQuote, Associated With: Roberto Mangabeira Unger, Lead section
For Unger, the market, the state, and human social organization should not be set in predetermined institutional arrangements, but need to be left open to experimentation and revision according to what works for the project of individual and collective empowerment.
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