Markets are not bad.
What? Is this not the same Chris Henrichsen who has proudly proclaimed to be a socialist? That is indeed me (and you must not have read those blog posts).
Markets play an important role in a healthy political economy. They promote the existence of affordable quality products and services. They disperse economic decision-making power.
However, markets cannot do certain things. The are not indicators of virtue or moral value. The are not always the best at determining good taste in art.
The primary strength of markets is determining prices. Yet, markets are not a good in and of themselves. Humanity is the only good in and of itself. To the extent that markets advance the human good, they should be sustained and promoted. However, when markets promote extreme inequality, poverty, and cruelty, there is no defense for these aspects. Note that this does not require us to abolish markets.
This is why the social contract is so important. A democratic system of government is needed to mediate the negative by-products of the market. This is also why it is important to have a just basic structure of society.
Democracy is the best means of securing the human good. Markets play a role. So do governments. But both markets and governments become social ills, as opposed to social goods, outside of a democratic setting.
Radical Moderation 
Whoa, your color changed. I like.
Me, too. Happy Birthday.
I can haz definitions?
1. humanity (as in “the only good” not as in “the population of Earth”)
2. human good
3. extreme inequality
4. cruelty
Sure, just for you.
Humanity: Human beings. The are the only thing which we should value for there very own sake.
human good: those things which allow for a decent huiman existence.
extreme inequality: This can take a number of forms, but one example would be where we have within our society some with extreme wealth, while others go to bed hungry.
cruelty: the deprivation of human dignity.
Sure these beg additional defininitions. Things like the human good are ultimately defined through democratic discourse.
Thanks for stopping by.
Great post, Chris! I agree with most of it.
By “market” do you use that term in a macroeconomic sense or micro?
David,
I am not sure. How would you differentiate between the two?
I ask whether your take on “market” has in view the micro vs. macro economic perspective because the two often have very different drivers, motives, incentives, and participants. You said that the “primary strength of markets is determining prices.” From what I know, prices for some goods like commodities are most often generated from the micro-economic demand. For example, a micro-economic view of “market” will consider mostly just consumer-level decisions and transactions, so elements such as government are (largely but not entirely) omitted. Moreover, a micro-economic incentive may or may not have a mass effect on the larger, macro-economic environment. The macro viewpoint will take things into consideration like M2, inflation, etc., which many micro-level decisions ignore or don’t feel the effects of but once in a blue moon. For price determination, larger, macro-related forces sometimes drive the market (rent control, price fixing, import tariffs, etc.), yet the incentives and payoffs are different for each. From what I can tell, I think you’re coming at this from the macro-economic standpoint, if I’m not mistaken. If you are, then yeah, I mostly agree with your post.
Scott B., I think it was rude of you to cut my question out like that. Just because you don’t think it’s relevant doesn’t mean I don’t. The emphasis for my M.B.A. is economics. I care about the distinction between the two perspectives, and I believe my question was relevant for me (and perhaps not you) to understand where Chris is coming from. Not everyone comprehends the world the way you do. I would never do this to you. Uncool, man.
David,
I think that you may be right. I have not really considered whether I was coming from a micro or macro perspective and I think that it could include both. That said, I am not as well read in these distinctions, at least as economists address them.
You’re right, Chris–those definitions just ask for more definitions. Brad Kramer once criticized me–and economists generally–for being unwilling to give him a definition of markets or some other economics terms that didn’t depend on more definitions. He was right, because without a priori definitions, everything boils down to ideological strawmen.
Thus, unless you can define “deprivation of human dignity” “extreme wealth” and “decent human existence” in concrete terms, then this is all just a strawman, and you haven’t advanced a refutable hypothesis.
Also, the micro/macro difference is IMHO irrelevant to this discussion, so carry on.
“Thus, unless you can define “deprivation of human dignity” “extreme wealth” and “decent human existence” in concrete terms, then this is all just a strawman, and you haven’t advanced a refutable hypothesis.”
It is all stawman garbage and you all should ignore it.
The deprivation of human dignity is treating people as a means to other ends, and not treating them as an ends in themselves. This can take place through extreme political oppression. It can be through brutal working conditions which make life unbearable. Slavery would be the most extreme example. Additionally, turture, physical brutality, and the denial of such things as food, shelter, and clothing.
A decent human life is one were you can choose to live as you would like, rather than merely surviving. This is best articulated by the capibility approach to development which is articulated by the Economist Amartya Sen and the philosopher Martha Nussbaum. She discusses this in the video clip which I shared in an earlier post: