Post 2

What does the author see as the defining characteristics of a market? Select a quote (or quotes) from the text as evidence of his view.

            In this chapter, McMilan refers to “a market” as the “specific physical space or cyberspace where goods are bought and sold… a market is a forum for carrying out exchanges” (6). Market transactions are what goes on in markets, and McMilan’s definition is “an exchange that is voluntary: each party can veto it, and (subject to the rules of the marketplace) each freely agrees to the terms. If there is a lack of autonomy in an exchange, by definition the dealing isn’t a market transaction. Other nonmarket transactions include unpaid household work, intrafirm business, and government activities. Interestingly, competition is not a defining characteristic of a market to McMilan.

McMillan writes, “Markets provoke clashing opinions. Some people revile them as the source of exploitation and poverty. Others extol them as the font of liberty and prosperity.” Have you observed these kinds of opinions? What might cause some people to distrust markets? What might cause other people to distrust government control over economic decisions? Do you personally lean one way or the other?

            I have heard many people express their opinion that markets are the source of exploitation and poverty, however I haven’t heard many people express them as the font of liberty and prosperity. There are a few reasons why some people would distrust markets, one being, especially online, that consumers do not know what they are buying. By this I mean how the product was obtained, manufactured, and transported. The workers and tools used in the process could have been mistreated and been bad for the environment. Also, to look at the worst-case scenario, people could have died getting the product for the consumers. Another reason people could distrust markets is that they don’t know if they are getting a fair price. This distrust is brought by lack of government control where businesses are only looking out for themselves and not their workers and consumers. On the other hand, with government control, many people say that economic growth decreases and may even become stagnant. This could be because this discourages individuals from coming up with innovations that drive the economy. It takes out the trial and error that makes economies strong. Government can take out the adaptability of the markets.

            My personal opinion lies somewhere between government control and a free market. I believe that an economy needs some government control to make rules to organize and make transactions more sophisticated but with a good sum of free room for businesses to make their own decisions to give the spontaneity to the markets.

McMillan uses folk football as an analogy for a completely lawless market and claims that modern markets are governed by rules (as are the modern sports of soccer, rugby, and American football). What market rules would you say are important for modern markets? Why?

            There are a couple market rules that are important for modern markets, one including buyer-seller transaction agreement honesty and trustworthiness. This is important because relations do not go so well when the seller can not be trusted to give the true product, or any product, to the buyer. Also, when the buyer cannot be trusted to pay for the product or service when they have consumed, transactions are not exchanged well. Another important rule for modern markets is that property rights are protected. I’ll use software as an example, but any product or service can work. If a company spends a lot of time and money on some revolutionary software, they want to keep their well-earned profits from that software. If they do the correct things to protect it, they won’t have any problems with other companies to take their software. A problem arises when people take and sell the software independently of the first company, who didn’t do any work to develop it. If the software is not protected, the drive to innovate lessens because the reward is severely less.