Jerry Muller, author of The Mind and the Market, gives a brief synopsis of his book.
In previous societies, one’s status as a peasant, artisan or merchant often defined one totally. Being a member of a guild, for example, encompassed a complete set of social roles — economic, legal, political, and even religious. Modern market society, by contrast, is based upon looser, more temporary associations, founded to pursue specific economic, cultural, or political interests. Such associations demand only a small part of the individual, sometimes only a monetary contribution in the form of dues. As a result, the modern individual can belong to a greater range of groups, but groups which are looser and less all-encompassing. In contrast to earlier forms of association, modern associations allow for participation without absorption. They make it possible for the individual to develop a variety of interests and to become involved in a wider range of activities than would otherwise be possible, yet to do so without surrendering the totality of his time, income, or identity to any particular association, from the family to the state.
Anthropologist Alan Fiske has identified four modes of transactions among people: communal sharing (to each according to his needs); authority ranking (hierarchical rulers); equality matching (taking turns); and market pricing. Of these four modes of interaction, I believe that market pricing scales the most gracefully.
Communal sharing does not work in groups larger than an extended family or clan, because trust breaks down among larger groups. There is the well-known “rule of 150” in sociology, which is that it is not possible to know more than about 150 people well enough to have sufficiently strong social ties that no formal rules are required.
Equality matching, such as taking turns at a four-way stop, works when there is a natural convention that makes equality easy to define and natural to implement. When equality is ambiguous or the convention is not readily understood and adopted, it fails.
Authority ranking can achieve scale in the form of a dictatorship, but only at immense economic and moral costs. Rulers must focus on repressing competing elements of power.
Market pricing, as Muller points out, allows people to engage and disengage with strangers on a flexible, voluntary basis. In my view, this makes market pricing the best mode of interaction for large, complex societies.
The way that I look at it, people on the left tend to think of government as a way to bring communal sharing to bear on the otherwise harsh forces of the market, which many on the left see as a system of authority ranking (the rich dominating the poor). People on the right instead tend to see government as an authority-ranking alternative which is less moral than market pricing.
For Discussion. Does the market facilitate “loose, temporary associations” as described by Muller, or opposing classes as described by Marx?
READER COMMENTS
Andrew
Jan 15 2004 at 11:51am
I think both models are valid — the “loose, temporary associations” are based on direct or indirect personal contact, and are often geared to small-scale, well-defined goals, while the point of a class in Marxist terms is that members of a class have a common interest towards various goals at the highest scale ( trade v protectionism, redistributive taxation v low taxation, peace v war, etc).
It makes sense to talk about large landowners as a class, or public-sector employees as a class, at the same time as
talking about, say, environmentalists as an association, or a particular professional body, or residents’ association, and so on.
CC
Jan 15 2004 at 1:47pm
As broad generalizations I think those classifications are useful characterizations. For example, it may be that different cultures/societies/countries what have you can be identified by what mix a population employed, and could then be placed in a kind of taxonomy for comparative purposes. It may even have some explanatory power within an overarching theory of development.
But it shouldn’t be the only way to look at human interaction because it overly simplifies, in my estimation, the quantity and quality of exchanges within and among the modes of distinguished transactions. For example, corporations are, in many respects, command economies operating and disciplined within a larger market ecology.[1]
The schema neglects, or at least does not allow for, hybrids, which I think inform and encompass most if not all transactions. Making concrete divisions out of what should only be considered heuristic distinctions may lead one analytically astray. The lines are by no means as clear cut as packaged, and as such threatens to present false dichotomies where none truly exist. Sometimes blurred lines are not a matter of resolution, but of perspective.
Moreover, ‘market’ transactions assume a classical pricing scheme (when an invisible hand self-regulates), at least in Fiske’s and Muller’s conception, and ignores nuances that arise from “technological” prerequisites of a market economy.[2] Information markets are quite different[3] from commodity and service markets are quite different from monopoly/monopsony markets. The ‘market’ designation obscures as much as it illuminates.
Further, when ‘money’ is defined as a system of implied agreements (often at the communal/authority level depending on your POV, as pointed out by Kling) the modes set out by Fiske and Muller to singularly evaluate each on their own merits suddenly make sense only in toto. The real value of this model then is not so much in its set of distinctions, but in how well it can document and increase our understanding of the set of relationships between the different modes.
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[1] http://www.j-bradford-delong.net/Econ_Articles/Command_Corporations.html
[2] http://www.j-bradford-delong.net/OpEd/virtual/technet/spmicro.html
[3] http://www.firstmonday.dk/issues/issue2/different/
Lawrance George Lux
Jan 16 2004 at 12:54pm
“. Does the market facilitate “loose, temporary associations” as described by Muller, or opposing classes as described by Marx?”
The market tightens as well as loosens. Income levels finds greater commonality, and professional and educational associations unite for interests not center to their occupations. Segmentation of society will occur under any cultural system, relationships growing closer under increased competition for the rewards of society. lgl
Monte
Jan 19 2004 at 12:42pm
“Does the market facilitate “loose, temporary associations” as described by Muller, or opposing classes as described by Marx?”
I would argue the market facilitates loose, temporary associations that evolve into opposing classes. At the foundation of every human interaction is the goal of maximizing benefits and minimizing costs, commonly referred to by psychologists as social exchange theory (SET). SET is the impetus underlying all economic activity, bringing together society’s means of production and the labor necessary to pursue profit, capitalism’s raison d’être.
Though Marx accurately predicted the development of a class society under capitalism, his prediction that it would ultimately collapse under the weight of its own success has failed to materialize due to the fact that the rate of profit has remained remarkably stable and real wages have risen.
So…I guess the short answer is both.
Peter Sinclair
Feb 18 2004 at 12:22am
I have not read Jery Muller’s book but note that Alan Fisk’s (1990,1992) respresentations of elementary forms are merely building blocks from which more significant cultural syndromes are constructed (Triandis 1994.
Marx’s focus is not the market but the labour theory of value. Historically, political economics is more sociologically rooted than is classical economics.
Regarding, Fiske’s (1990,1992) resprentations in social reality (Triadis 1994) regarding Market Pricing, I would be more inclined to compare Classical Economics with Chinese Capitalism (Redding 1990). The former, is often based on exchanges unknown parties. The latter is focused on guanxi between known parties. The former leverages the Law and the latter, utilitarian relationships.
Peter Sinclair
Peter Sinclair
Feb 18 2004 at 12:22am
I have not read Jery Muller’s book but note that Alan Fisk’s (1990,1992) respresentations of elementary forms are merely building blocks from which more significant cultural syndromes are constructed (Triandis 1994.
Marx’s focus is not the market but the labour theory of value. Historically, political economics is more sociologically rooted than is classical economics.
Regarding, Fiske’s (1990,1992) resprentations in social reality (Triadis 1994) regarding Market Pricing, I would be more inclined to compare Classical Economics with Chinese Capitalism (Redding 1990). The former, is often based on exchanges unknown parties. The latter is focused on guanxi between known parties. The former leverages the Law and the latter, utilitarian relationships.
Peter Sinclair
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