How mythical markets mislead analysis: an institutionalist critique of market universalism
journal contributionposted on 19.02.2019, 14:40 by Geoff Hodgson
Market universalism refers to the non-metaphorical tendency to use the term market to describe a wide variety of arrangements or processes in the real world. Using institutional criteria, this paper establishes some minimal necessary features of a market, to show that some particular arrangements are not markets. For example, while mechanisms of competition and interaction are ubiquitous, ordinary conversation is not literally a ‘market for ideas’ and much of politics is not literally a ‘political market’. Markets are not and cannot be universal. Yet market universalism overlooks missing markets, the theory of which implies that we are in a world of second-best solutions and that markets are not necessarily the answer to every economic problem. Also, by reducing politics to a form of ‘market’ economics, market universalism downplays the distinctive, non-market nature of the political and legal spheres and corrodes the conceptual separation of civil society from the state.
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- Loughborough University London