At about the age of thirty, simply by following logic and observation wherever they led, I came to the unremarkable conclusion that markets are robust generators of wealth, and, as such, contribute in vital ways to human welfare. But, at the same time, I recognized that their very robustness not only amplified our productive activities, but also their destructive side-effects. And I have always been aware of the danger of false idols, whether they come in the form of the U.S. Constitution (“Constitutional Idolatry”), an oversimplistic and self-defeating conceptualization of liberty (Liberty & Society), or a pseudo-economic conviction that markets are completely self-regulating providers of all that is good and holy on Earth (The Economic Debate We’re Not Having, Regulation of Financial Markets).
Markets aren’t just functional, but, especially in the traditional sense of actual locations where wares and ideas are hawked, they can also be vibrant slices of life (Welcome to the agora!). The notion of human beings coming together to exchange the products of their hands and minds is an inherently appealing one. And the vitality of such places, the color and richness and pageantry of human activity, especially in its more primative forms, is hard to deny. Life isn’t just about producing and consuming wealth, or even ideas, but also about living, and such places are rich with the act of living. (Ironically, I can barely stand to spend two minutes in modern malls, finding them to be mind-numbingly sterile rather than lively).
The German Sociologist Max Weber warned about a century ago of “the iron cage of rationality”. The evolutionary logic of human history increasingly “rationalizes” our social institutions, but not necessarily in ways which maximize human happiness and welfare. The theme is similar to the one found in Aldous Huxley’s famous novel Brave New World, or Fritz Lang’s famous silent movie Metropolis: We gradually turn ourselves into cogs in a machine which operates according to a logic of its own (maximizing “efficiency”), sterilizing our world, reducing us to servants of the machine we have created, and sapping our lives of that which makes them truly satisfying to us as human beings.
It may well be that this precautionary tale is overstated, that efficiency itself eventually recoils from too much dehumanization, because the human mind and imagination, a resource whose maximally efficient functioning is an essential component of an efficient social institutional framework, does not thrive in such sterilized and dehumanized contexts. But, be that as it may, there is certainly one force in play, the drive toward increased mechanical efficiency (which would prevail, say, on assembly lines), which can be a brutal tyrant as well as a generous provider.
When we focus exclusively on GDP as the indicator of economic success, and ignore the gini coefficient (the statistical measure of inequality in the distribution of wealth) and the ecological and public health damage caused by the production and consumption of that wealth, we are surrendering to the iron cage of markets, privileging “efficiency” over all other concerns. There is nothing inherently just about those born into the world with inferior opportunities (less inherited wealth, social network advantages, and familial experience of success to serve as a model, for instance) being left either to beat the odds or suffer the consequences, not because life has to be fair (or ever fully can be), but because we should not casually shirk our responsibility as human beings to make it more so. There is nothing wise about privileging the production of wealth today at the expense of the Earth’s biodiversity and the predictable future costs, perhaps truly apocalyptic in scale, of our increasingly aggressive parasitism vis-a-vis the host body upon which we depend.
But markets do not have to be inequitable, nor parasitic. We can be the wise stewards that we need to be, incorporating into the mechanisms of markets themselves the goals and values that they do not automatically attend to. We can “internalize the externalities” so that market activities which impose costs on others, both today and in the future, are priced in ways which force buyers to take those external costs into account, so that buyers can decide if the value to them is truly worth the costs to others (thus, in aggregate, reducing those activities to the levels that truly serve our collective long-term interests). And we can make public investments in the development of both human and material infrastructure, to make markets more robust producers of wealth, and human beings regardless of the chances of birth more fairly able to partake of that wealth. We can keep working to get it right, rather than to surrender our wills to some dehumanized force that we have turned into a false idol.
In terms of addressing abject poverty, markets as they currently exist leave many behind. Those living primtive lives have little to offer to attract the wealth produced elsewhere, and, when they do (generally in the form of natural resources), markets are brutal exploiters of their desperation, paying them less than those less in need would receive. But we can use markets, intentionally, to do what they do not do organically: We can provide infrastructural investments which create the ability to produce something for local markets, and tiny start-up loans to enable poor folk in poor conditions (mostly women) to engage in some productive activity (“Grameen Banks” have been hugely successful in this: http://www.grameen-info.org/). We can devise small innovations, like trundle pumps (to ensure potable water where water is scarce), and cook stoves (to reduce the emissions of black soot that plague many desperately poor people around the world, and contribute significantly to global warming), which get those most in need into a position where they can benefit from markets. We can see markets as a valuable tool to be utilized in this shared human endeavor of ours, rather than a justification for doing nothing to address the horrors of an unjust and in many ways self-destructive status quo.
We must always be the masters of our technologies and social institutions, never their servants. They exist to serve a purpose, not to demand our allegiance and submission. The vitality of markets, in the modern sense, as robust producers of wealth, and in the traditional sense as vibrant slices of life, needs to be made whole again, if not in the actual appearance and ambience of most of our marketplaces themselves, than in how we view them. Markets are vehicles of life, where we come with our needs and desires and offerings, to enrich one another both materially and spiritually. And it is incumbent upon us that they are inclusive rather than exclusive, providing opportunities rather than exploiting desperation, and addressing problems more robustly than they create them.