Reinventing the Bazaar: Chapter 1

In this chapter, McMillan discusses a few defining characteristic of a market. He believes that the the core the global market is based on decision making autonomy and market transaction. In this chapter he focuses on how decision making autonomy is a vital characteristic of the market, for various reasons. McMillan defines a market when he writes, " A market for something exists if there are people who want to buy it and people who want to sell it" (pg. 5). The importance of decision making is shown in this definition because a market can only be present if both the seller and buyer decide and agree to buy or sell the item. McMillan goes on to express this idea when he writes, "Participation in the exchange is voluntary; both buyer and seller are able to veto any deal. They are separate entities." (pg. 5). This quote shows that McMillan believes that a market can only be present if both buyers and sellers independently decide to buy or sell a product. He goes on to elaborate how the decision making autonomy is curbed by competition because it prevents either side from having a decisive effort, or a bigger role in the transaction. McMillan shows this when he writes, "A consumer can say, "No, I'll shop elsewhere." A competitive market means that alternates exist"(pg.6). This allows for consumer to have a choice in the price they pay, and not be forced to pay a one certain price.

         The other major characteristic of the market that McMillan describes, market transaction, describes how every transaction is voluntary. This means, that both sides, have the ability to veto the transaction or agree to the terms. He talks about how the markets is a forum for which all these transactions and agreements can be made.

I have observed and heard both of the opposing sides of the market and the central dogma of each. However, I disagree with the idea markets are the source of exploitation and poverty, personally I find myself leaning toward the dogma that markets are "unambiguously beneficial". That said, I do not believe that markets are necessarily always beneficial, and I do not think they should be characterized as "unambiguously" beneficial. I believe that while markets are usually beneficial, there are instances where the market may be unhelpful. I agree with McMillan when he writes " Left to themselves, markets can fail. To deliver their full benefits, they need support from a set of rules, customs, and institutions". (pg.14). This means that although markets are very important and can be the most potent antipoverty engine when they work well, they need the proper structure in order to work well. Though I lean towards the opposing side, I still understand the other dogma, in which markets are a source of exploitation and poverty. 

           Those who do distrust markets and believe in this school of thought have a good reason too. McMillan writes about how in certain places, although there are markets everywhere, they are still suffering from poverty. People may distrust markets, because they do not work well everywhere, and in fact they may show and encourage the exploitation of the the impoverished people working in these markets. People who distrust government control over economic decisions have their own reasons, too and as history shows that may be correct in believing this. I agree with McMillan when he writes " Governments in poor countries sometimes intervene excessively, to be sure, stifling markets and exacerbating the poverty"(pg.14). This quote would lead many people to distrust governments because  their increased involvement and interventions can backfire and actually hurt the markets. 

           

McMillan's comparison of folk football to a completely lawless markets, and both their developments, is very accurate and developed similarly. Before it was the soccer and rugby we know today, folk football was originally a sport with few rules that arose spontaneously (and were different depending on the place). This sport was a disorganized free-for-all, before being transformed to soccer and rugby. This transformation was done when two National governing bodies (Football Association and Rugby Football Union) codified the rules. These rules organized both sports and created the great games we know today. The implementation and enforcement of the rules, are what evolved the original folk football. This is very similar to the evolution of a typical market. They both originated and evolved spontaneously by their respective participants. They both were able to operate with rules or structure to a certain point, and in order to become sophisticated and develop they need  the formation of formal rules (instead of informal rules), which were clarified and enforced.

           The market rules that are important for modern markets are the definition of property rights, and  price control. Price control is an important rule because, although part of competition is formed by prices, there should still be range in which the price competition occurs, to ensure fair competition and thereby giving the consumer more choices from whom they will buy from. The more important market rules focuses on property rights. Just as in the past in smaller markets, the transfer of property is still maintained. In fact property transfer was one of the first market rules to develop. For example in the early civilization near the Fertile Crescent, writing was first developed as a means of recording economic information. Although they were written and recorded differently, property transfer was still used to tally the amount of product the seller still had. Though it has a changed importance in today's market, the recording of property possession is still very important for modern markets. Today, by recording possession, different companies can see which demographics purchase or own most of their products, by doing this they can then find which demographics to focus on, or they can focus on developing different products for different demographics and see if that demographic goes on to purchase and posses that product.