What is 'The Market'?
On definitions and language [GPT translated into the style of George Eliot]: Amidst the labyrinth of digital discourse, where language is often draped in the garb of buzzwords and catchphrases, even the most ordinary expressions may assume a kaleidoscope of interpretations, moulded by the singular context and designs of the speaker. As you find yourself amidst a disagreement in the vast digital landscape, let it be your endeavour to pause and ascertain if, indeed, your exchanges are woven from the same tapestry of language.
A Definition
‘The Market’ can be understood as a complex system comprising numerous independent agents with diverse interests. Through their interactions these agents maintain a dynamic equilibrium that is capable of rapid adaptation during periods of sudden change. The system is elegantly able to produce an emergent change in itself in response to stimulus that typically can be faster, and more accurate than an intelligent design of even the most neutral and capable individual agent. This literal super-human power attracts many fans, deservedly so, although it is worth pointing out that ‘The Market’ is far from the only complex system capable of such exceptional adaptation.
The ulti-mother of all complex adaptive systems is evolution by natural selection, particularly when considered at the level of an ecosystem with multiple species and multiple individuals in co-dependence and competition with each other. As the orchid evolves to better mimic the bee, the bee evolves to better distinguish between potential mates and deceptive flowers. At the more maligned end of the scale: politics, or whatever social and legal system emerges from a group or culture, is also such a complex system. While it may not seem so sophisticated looking at the tip the iceberg, the processes that shape the laws and political direction are clearly an emergent outcome that really doesn’t seem to match the plans of any individual intelligent agent (perhaps fortunate given the calibre of agents sitting at that tip in recent years).
When considering these complex systems, some obvious similarities emerge. In fact, in a purely scientific bio-physical sense all could even be said to derive as mere sub-components of the evolutionary process of life on planet Earth. First there is evolution by natural selection, leading to life capable of complex social dynamics, resulting in an economic system producing market dynamics. Alternatively an ardent economist might better understand evolution and politics best in the terms ‘the market for genes’ or ‘the market for ideas’, mere subsets of an all encompassing market theory. Viewed like this, through opposite ends of the same metaphorical telescope, it becomes apparent that it is impossible to fully separate an economic market from those other complex systems, that they have emerged and function together as one greater whole.
A truly functional market is inextricably linked to social and legal systems that provide essential feedback mechanisms. This realization challenges the notion of a “Free Market” devoid of social feedback or legal frameworks. A market operating in such a vacuum will be vastly more inclined to the naturally profitable monopolistic practices and corruption we would consider perverse. Consequently, a generous interpretation of “Free Market” must assume included mechanisms for incorporating social feedback. This is particularly important when dealing with industries that naturally tend toward monopolistic structures or are designed to provide public goods, such as power, water or transport networks. Often, democratic politics can be assumed to serve as the primary conduit for social feedback, which underscores the importance of a robust democracy in fostering a healthy market. But we could be open to other mechanisms, it would be enlightening to hear more from that part of the discussion. After all, it would be ungenerous to assume that all proponents of a free market are just interested in pursuing their own corrupt or monopolistic interests.