It is time to topple the false gods of capitalism - The market is the pillar of capitalist ideology, yet it is just another human institution invented and reinvented periodically across human history
“Market mechanisms” and “market solutions”: politicians, bureaucrats, media pundits, and academics like to refer to them as if they were somehow politically and ideologically neutral, above partisanship. They are not. Or as if they were uniquely fair and optimally efficient, which they are not either. The market is just another human institution invented and reinvented periodically across human history.
Alternatives to markets always existed and also do now. Councils of elders, chiefs, local governmental authorities, religious authorities, and various cultural traditions, separately or together, have distributed products from producers to consumers, deciding who gets how much. Within households or families, kinship rules, including patriarchy and matriarchy, have organised the distribution of products from producers to consumers.
Word spreads that a “shortage” of the item in question exists; demand for the item exceeds its supply in the market. Buyers immediately compete for the item in short supply by bidding up the prices that they can offer for it. As prices rise, the poorest buyers drop from the bidding as they cannot afford the higher prices. If, nonetheless, prices keep getting bid up, the buyers who have slightly more purchasing power than the poorest also drop out because they too cannot afford the higher prices.
Defenders of markets retort that the rising price is how the market “signals” to producers to manufacture more so that they can tap into the high profits generated by high product prices. But this “signalling” feature is well-known to all employers. They know that if they were to respond to the signals by producing or ordering more, the high prices and profits they are enjoying would quickly disappear. So the employers often exhibit no rush to produce more.
The United States federal minimum wage rate of $7.25 an hour was last raised in 2009. Employers also encourage automation, relocating jobs abroad and bringing in immigrant workers. These steps involve several levels of manipulations of the job market’s supplies and demands to the end of slowing, stopping, or reversing wage increases. Employers manipulate labour markets, like product markets, for profit.
The employer class itself often suspends and displaces markets. When the profitable manipulation of markets becomes too costly, capitalists often merge with or acquire one another. The external market relations between them then disappear. In their place, directly planned internal production and distribution of goods and services occur without exchanges.
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