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In response to Tony on October 4, maybe I can reduce the confusion
by narrowing the query.
(1) I do eventually want to develop my own ideas. But to limit the
enquiry, on a history list, I want only to find out what other people
mean by 'the market', particularly those economists that speak of it.
Adam Smith's chapter III is entitled 'that the division of labour is
limited by the extent of the market'. Walras lesson 5 is entitled 'the
market and competition.' Marshall, it is true, speaks alternately of
'markets', 'the market' and 'a market'. But the practice of speaking of
'the' market is alive and promulgating: Chapter 1, Section 1-2 in Begg,
Dornbusch and Fischer is headed 'the role of the market'. I neither
invented this usage nor defend it! At this point I ask only what these
people mean by it. My innovation consists only in asking where they
place its boundaries; since they do speak of 'the' market, where do they
think it begins and ends?
(2) I'm not convinced they just mean 'the economy'. If so, why do they
distinguish 'market economy' from 'planned economy'? Surely, the very
use of this distinction draws a boundary. Again, I'm not inventing it; I
observe it in economic writings. I'm simply asking where the writers
think it lies.
(3) In like vein, do economists actually in practice treat the market as
'an analytical construct whose boundaries are wherever we choose to
put them'? They may feel free in themselves to set boundaries where
they please, but they present the results as hard science, which to me
implies a claim that these boundaries exist independent of volition, and
that such economists have special knowledge about where they lie.
What is the basis of this special knowledge?
I could present much textual evidence but for brevity I'll cite Soros
(1999:40 'The Crisis of Global Capitalism', Pub: Little Brown & co):
"There is a prevailing belief that economic affairs are subject to
irresistible natural laws comparable to the laws of physics"
I don't think Soros is just writing about the naive public: I think he is
also talking about economic thinking as it presents itself to the world,
which is as a hard, objective, science on a par with its natural
counterparts. These natural counterparts don't allow themselves to set
boundaries where they please. They take great care with analytical
distinctions. Economists may think this is a bad idea, but not to the
extent of renouncing their claim to be scientists. To the extent that they
write as scientists, I think there is an implied claim that their distinctions
have an objective, analytical foundation. What is this foundation?
(4) Which brings me back to my original question: since many
economists do speak and write as if there was a definite institution
called the market, and since they clearly claim to know more about this
institution than non-economists, and since they act as if this knowledge
is based on the scientificity, in some sense, of their activities, where
exactly do they locate the boundaries of the objects of which they
claim to have special scientific knowledge? What is the basis of their
science?
Alan
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