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Responding to Alan Freeman and Pat Gunning. 
 
I agree with everything that Pat says. I hope what I have to say  
complements it. I also agree with Mary Schweitzer that the meaning of  
words changes.   
 
Alan: your mail clarifies the question greatly. I will concentrate on the  
question: what do economists mean when they speak of 'the market'?   
 
Words do not have to have a precise meaning. 'Energy', for example,  
has a precise meaning in physics but is used elsewhere with a broader  
meaning - one might say that a performance had great energy. Similarly,  
discussing (say) baseball or rugby, one might talk of 'the game'  
meaning either a particular game which is under discussion or the sport  
of baseball (or rugby, or whatever) as a whole. In the latter case, one  
might refer only to the professional game or to the game as it is played  
at club or school level, and so on. The meaning is context dependent.  
Most words have meanings that are context dependent and are more,  
not less, useful as a result.   
 
One of your examples is Adam Smith - 'the division of labour is limited  
by the extent of the market'. In that case, surely, he was referring to the  
extent of the market for each particular product. Division of labour in  
pin making is limited by the extent of the market for pins, and so on,  
product by product. Smith uses the word here and there in the Wealth  
of nations, with differing, context dependent meanings - for example,  
'on the market' means 'for sale', and so on. I don't think Smith had any  
single, clearly defined concept of 'the market' in general. Why should  
he?   
 
In many cases, I guess, where no particular market is specified  
explicitly or implicitly, 'the market' means markets in general.  
Vagueness may be desirable, to leave open the question of which  
things are markets or are like markets in some way. I don't believe that  
there is any generally agreed answer to your question, but that need not  
be a bad thing. Some things are close to being competitive markets,  
other things are further away from the ideal but market theories may still  
 give us useful insights.   
 
Two more comments. First, I don't believe that any competent  
practising economist would claim that there are 'irresistible natural laws'  
in economics like those of physics. The whole tendency is away from  
that kind of thinking with the development of the economics of  
information and game theory. Second, I think that by referring to the  
market as 'an institution' you are on the right track. But it is not clear  
where the boundaries of an institution are drawn. Take the institution of  
'the state'. Are UK universities part of the state? US private universities  
which receive federal and local government funds? What about  
veterans organisations, political parties, lobbyists? And so on. We can  
reasonably draw the boundaries in different places according to the  
problem at hand.   
 
Tony Brewer ([log in to unmask]) 
 
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