----------------- HES POSTING ----------------- 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]) ------------ FOOTER TO HES POSTING ------------ For information, send the message "info HES" to [log in to unmask]