----------------- HES POSTING ----------------- Thanks to everyone who responded publicly or privately to my query. I'm daunted by the wealth of informed comment, and will follow up the references as diligently as I can. Pat Gunning's thoughtful response emphasises the substance of my question: 'what do economists mean by the market'? My enquiry began because I felt this hoary question might usefully be restated as 'what do they consider internal to the market, and what do they consider to external to the market'? I mentioned the 'analytic' foundation of the distinction, but this didn't seem to get picked up. I don't think 'analytic' is the same as 'absolute'; I want to know if there is some other basis for the distinction than personal whim. I can't see, for example, that the reason one treats water as part of a river, and an aeroplane above it as outside the river, is reducible to rhetoric. I think it has something to do with objectivity; pace postmodernism, I feel it arises from any reasonable way of conceiving what a river or an aeroplane actually is. A second point. It is possible to miss an important refinement if one does not also distinguish an internal phenomenon from an external linkage. This is an additional idea I'd like to throw into the discussion. Separate systems can interact, and this does not make them the same system. Take the extreme case I gave of an interaction between the market and the climate. The market interacts with the climate. Does this make the climate a part of the market? If so, then by the same argument, the market is a part of the climate. I'm not sure how our noble profession would react to becoming a branch of meteorology. I think the fact that we feel compelled to speak of an interaction 'between' climate and market, shows than there is something about the objective nature of the two systems that obliges us to distinguish them apart, despite their causal links, on the ontological grounds that each has sufficient internal coherence to be studied in its own right. This is what I mean by an 'analytical' distinction. One can have distinct objects or systems, each coherent in itself, that interact. Each is governed by a combination of intrinsic elements and external linkages. It is true we can identify those variables in an equation system that are connected, but this doesn't tell us whether a connection is intrinsic or a linkage. An additional criterion is required that must come from outside the equations as such. I think this criterion is analytic and has to do with the nature of what is being studied, not the equations that represent this nature to consciousness. For the same reason, I don't think the question is entirely answered by distinguishing the variables that one holds fixed from those that one allows to vary. To be sure Marshall holds, say, fixed investments constant in the short run. I'm not convinced he meant to say that fixed capital is only part of the market in the long run. If he did, I think he was wrong: it would be like saying the stomach is only a part of the body when one is eating. I think he meant that fixed investments are always a part of the market, but in studying some of the market's behaviour, one may ignore their variation. So my question can be rephrased: what is the analytical basis on which economists, historically, have distingushed the market, and its inner or endogenous components, from those external or exogenous systems or factors with which it may very well interact? Alan ------------ FOOTER TO HES POSTING ------------ For information, send the message "info HES" to [log in to unmask]