Markets, in their Place

...Anyone familiar with daily life in the Soviet empire during the heyday of central planning will appreciate this point...

...Markets come in all forms and serve all sorts of interests...

...If one were to take many of these economic fables at face value, then we would expect all countries with highly developed welfare states to be drowning in unemployment...

...What principles should govern our efforts to resolve the tensions between prospective market efficiencies and the divisive, inegalitarian consequences that markets may bring...

...Assuring consumer access to such information—most of which either already exists or could readily be assembled —would trigger market processes that would leave virtually all consumers better off...

...34 DISSENT / Winter 1998 Third, when it comes to inefficient enterprises, be much quicker to protect individuals than institutions...

...No one really wants to come down against "efficiency," after all, even if the reckoning of that slippery concept is more than a little vague...

...It appears that, through tough bargaining between management and unions on the growth of wages, employment has been spread more broadly than in the other European welfare states...

...THUS, THE historical record of market power is considerable...

...No more, if I should find personal happiness by marketing hate literature, faulty merchandise, or environmentally destructive products...

...How can we relate such ideas to core values and assumptions of the democratic left...

...And this fact poses a historic challenge to the kind of thinking we do in Dissent...

...Yet the ideological mystique surrounding market thinking posits much more...

...This vision in turn implies a certain measure of egalitarianism...

...The conclusion here is nothing so crude as the superiority of the "Free World" over the "Evil Empire...

...But it may also devastate tourism— a major source of revenue in many parts of this country—in the longer run...

...Pursuing such goals offers a worthy agenda for the creative political and intellectual energies of the democratic left...

...an environment may need to be preserved for generations not yet present to pay for it...

...For them, freedom from constraint by others is the most anyone can hope for in social relations...

...The conviction is growing that all sorts of what should be considered collective responsibilities can be discharged more expeditiously by resorting to the market...

...Consider what may at first appear as some recondite realities of American retailing...

...My own response will probably differ from those of at least some Dissent readers...

...The high cost of medicine in the United States derives at least in part from antimarket restrictions on entry into the medical profession...

...No centrally planned economy has generated results remotely like this in the sort of economic world that has prevailed since the 1960s...

...This hardly means enforcing identical levels of material comfort...

...libraries may need to be maintained...

...But we should also be on the lookout for ingenious possibilities for market institutions that would better serve popular interests...

...What the Rights of Man were to the French Revolution—or what Manifest Destiny or the quest for the Kingdom of God on Earth were to their times—the market is to our own...

...The collective experience of entertaining, debating, and adopting a particular interpretation of the common good is an essential aspect of social experience—rather than only a means of settling inevitable practical questions of governance...

...Restrictions on market competition have a long list of beneficiaries —many of them closer to the top of the social heap than to the bottom...

...And here, of course, we part company...

...Which is to say, ideas associated with the market are central elements of prevailing ideology...

...There will always be settings where it is apparent that market arrangements, prospective or real, cause intolerable suffering to the weak, the DISSENT / Winter 1998...

...Children need to be nurtured, even if no one is available to bid for their affections...

...Thus it would be ridiculous for those on the left to seek a simplistic "thumbs up" or "thumbs down" on markets in general...

...Notwithstanding the considerable shortcomings of Western consumer societies, the market option to "just say no" to overtly unappealing commercial offerings is no trivial asset...

...Given the press of market thinking in all areas of public life, it is hard to think of any question more important for the left...

...their effects are often quite the opposite...

...It's that no political class, right or left, wishes to preside over a state that is losing out in international economic competition the way the Soviet Union did...

...Without such basic equalities, democracy is apt to be merely formal...

...But no one—I hope—will propose the thoroughgoing marketization of arrests and prosecutions, with such actions auctioned to the highest bidders...

...JAMES B. RULE'S most recent book is Theory and Progress in Social Science...

...The economic debacle of the Soviet empire —where ultimately no one knew the real cost of any good or service that was sold— demonstrates the destructive consequences of treating what should have been productive institutions as welfare cases...

...The left would have a stronger case here if it distanced itself from defense of the right of French locomotive engineers to retire at age fifty-two or from the protection via tenure of evidently irresponsible university instructors...

...33 unlucky, or the uninformed...

...The "efficiencies" extolled by market enthusiasts may be self-serving, myopic, or both...

...Instead, every political community must set certain minimal standards for the protection of common values —from the long-term health of the environment to the safety of the workplace to the educational development of the next generation— standards which cannot be undercut by bidding processes...

...When we do these things, we enable market arrangements to support democratic and egalitarian values, rather than to undermine them...

...Markets are institutions that allocate scarce things—from mousetraps to spouses to jobs—to the highest bidder, in processes supposedly open to all interested parties, and supposedly characterized by informed choice by all...

...Serving retailers is a system that produces information on those customers—in effect, all of us—without our having much to say about this information flow, or even much knowledge of it...

...Not for us...

...Yet market processes, I want to argue, are potentially constructive forces...

...If we take them seriously, we cannot help favoring certain courses of action, certain social arrangements, over others...

...Thus, if my skills, luck, or other market advantages enable me to fill my swimming pool with Chateau Latour and dine on gazelles' eyes while my neighbors live in destitution, no one has grounds to complain...

...Or to put it negatively: markets are not in any sense primordially "there" in every social situation, waiting for the chance to assert themselves in some natural form...

...we should have no trouble opposing these...

...BUT THE destructive consequences, where unavoidable, should be directed as much as possible to organizations, not to the people who work in them...

...Some institutions, of course, should never be intended to pay for themselves —the police and the courts, for example, or organizations devoted to defending children, the handicapped, or the homeless...

...welfare recipients whose benefits are terminated with exhortations to find a place in the job market when there are simply no jobs...

...Only human reason—and conscientious public deliberation—can distinguish between markets that sensibly serve key values and those that contravene them...

...Such tensions are not altogether bad, and in any case there is no escaping them—except through policies of uncritical market worship or equally uncritical market bashing...

...When this happens, as Schumpeter had it, a certain amount of "creative destruction" may be necessary to keep economic life dynamic...

...People may go through the motions of voting, and elites may make a show of appealing to popular will...

...In countless settings like these, we readily recognize essential collective responsibility for things that may have no adequate "market value" for any individual buyer at that particular moment...

...When do markets promise efficiencies that support the well-being of ordinary citizens and broaden the range of meaningful public choice in democracy...

...The lesson here is simply that the sorts of markets prevailing in American retailing today are those that serve the most powerful parties...

...instead, they sanctify the market as the paragon of all social relationships...

...Employees who learn to think of themselves as dispensable to the organization may adopt work attitudes that lower productivity in the longer run...

...Typically, the reasons cited have to do with the alleged "efficiencies" of market processes...

...These claims deserve to be taken about as seriously as tobacco companies' professions of ignorance (until recently) of the addictive qualities of their products...

...In doing so, we must exert ourselves to ensure that the advantages of markets serve interests we defend...

...More authentic competition to provide medical services, among more qualified providers, could well reduce those costs...

...The unchecked aggravation of such differences, always a tendency in any market economy, is bound to undermine authentic democracy...

...The activities of this industry enable retail businesses to compete more effectively in the market for the most profitable deals with "private" consumers...

...Its centrally planned economy could no longer sustain its international commitments —subsidizing Cuban sugar production, supporting guerrilla warfare in Africa, underwriting military allies in the Middle East, and so on—even as it proved unable to feed and house the Soviet population...

...Obviously my stance here provides no ringing, onesizefits-all ideological message...

...There is no doubt that many of the programs pursued most gleefully by today's market enthusiasts are aimed precisely at cutting down resources devoted to human well-being and other values crucial to the democratic left...

...We must be wary of market ideology as a Trojan horse for all sorts of schemes that are ultimately subversive of humane values...

...S0 WHAT do we have to offer that's better...

...Nor should we accept uncritically the stark trade-offs posed by many economists between welfare-state policies and employment levels...

...But of course, many of them do...

...Yet they are relentlessly partisan...

...Like firearms or nuclear fission, the problem is to secure their constructive application without unleashing the damage that their unrestricted use surely promises...

...There ex32 DISSENT / Winter 1998 ists in fact a kind of "market" in this country for credit customers, as retailers compete with one another to consummate credit transactions for big-ticket items—cars, vacations, major appliances, and so on—with the most credit-worthy, and normally the most affluent, consumers...

...Examples of all these things abound...

...Most dramatic among these is surely the collapse of the Soviet empire...

...And the dramatic growth stories in recent decades have all been under market conditions...

...The best society is simply the one that permits everyone to pursue his or her own private gratification—or to go to hell in the way of his or her own choice—with minimal interference from everyone else...

...OTE THE ironic contrast here between the vigorous, sophisticated market in — information about consumers and the underdevelopment of meaningful market information on products for consumers...

...On the contrary, we want to seek out market processes that broaden meaningful consumer choice...

...Like Karl Popper's famous riposte to another form of historicism, what I propose here amounts to "piecemeal social engineering"—an appeal to weigh the virtues and vices of specific market arrangements in their proposed or real contexts...

...Many of the best things in life, we are convinced, can only be realized jointly, through shared participation in some form of political community...

...Markets readily leave those with more assets or more bargaining ability or more marketable skills—in short, more of whatever is selling on the market at the moment—in dominant positions...

...When a particular line of economic activity declines or fails, it is the human lives involved that need to be saved...

...Certainly they have not gone unnoticed among the world's political elites—including the remaining old-line communist regimes in Cuba, China, and Vietnam...

...Our key obligations are to human beings, not to particular plants, production processes, or forms of work...

...As consumers, we would be much better off if we only had access to reliable information on the products and services offered by our "market" economy—that is, how long the average new Chevrolet will last before major repairs will be required or how many of a particular merchant's customers are satisfied with the service provided after sale...

...And indeed, markets are useful for organizing all sorts of activities...

...A contemporary example may help...

...But institutions that aim at producing marketable goods and services need to be held to market tests...

...DISSENT / Winter 1998 31 But the current high tide of market ideology is wearing away at such taken-for-granted notions...

...What forms of marketization should we support...

...or that get the public's business done in the most expeditious way— always without sacrifice of crucial human values...

...Finally, when you hear bloodthirsty policies put forward as mandated by "The Market," reach for your gun...

...Sometimes privatizing public services, like trash collection or hospital administration, works to undercut the welfare of vulnerable public employees...

...Where do we stand on the claims made by enthusiasts of markets...

...they are social institutions in their origins, and they remain subject to reconsideration, revision, and indeed improvement in relation to human purposes and values...

...Only the most conscientious critical reflection can provide bases for deciding what domains of life should be governed by markets—and what form any such market should take...

...rubber tappers pursuing their environmentally sustaining craft confronted with market-driven destruction of the forest...

...And beyond values embodied in flesh-and-blood human beings, many other essential goods may find no adequate bidders in the markets in which they come available...

...Thus, we see nervous efforts to attract foreign investments from regimes for which openings to outside investment come anything but naturally...

...While diversity 30 DISSENT / Winter 1998 is a virtue and civil liberty indispensable, we take it as axiomatic that everyone is to some degree diminished when any members of the potential community are excluded...

...Thus, we expect governments to embrace some sort of collective responsibility for informing the citizenry about drugs that are being marketed, or for ensuring national defense, or for guaranteeing a good education for every child, regardless of anyone's individual willingness or ability to pay for such things...

...By contrast, many of those threatened by market competition in their work are indeed underprivileged: low-skilled, low-paid workers faced with the movement of their jobs to places where even lower wages prevail...

...Thus, relations of parents to children, teachers to students, elected representatives to their constituents—any and all of these are, or ought to be, governed by market principles...

...Where, by contrast, is marketization simply a Trojan horse for the abdication of essential collective responsibilities...

...These of course include values embodied in human lives...

...We on the left need feel no categorical fear of market arrangements, then...

...Where and how, then, are we on the left to draw the line...

...They, like their counterparts in Mexico, South Africa, Turkey, and countless other corners of the world, have drawn a fateful conclusion: in their own most narrow interests, they must move their countries into some form DISSENT / Winter 1998 29 of world market participation...

...To acknowledge and act on such responsibilities is a classic role of the left...

...All of them are social creations...

...or that spotlight productive organizations and ways of doing things...

...A similar market approach, for that matter, has been proposed for the protection of endangered species: if only scarce whooping cranes or snow leopards were sold to the highest bidders, one could be sure that there would be someone with a strong (strictly private) interest in their perpetuation...

...Above all, we take the strongest exception to the dictum of that earliest of market ideologists, Thomas Hobbes, that "The value or worth of a man, as of all other things, [is] his price . . . ." Our conviction is quite the opposite—that all sorts of crucial values may be "unmarketable" at any particular moment, in the sense that no one party may be willing or able to pay for them...

...Much the same caution holds for matters of employment and job security...

...Sometimes market competition among companies engaged in environmentally sensitive activities sharpens pressure to reduce investment in environmental protection...

...The burden imposed on the human spirit by a system that leaves ordinary consumers with no option but to accept goods and services doled out to them by an overbearing, indifferent, centralized system is simply stultifying...

...Rather than taking any such indiscriminate course, we need constantly to weigh the pluses and minuses of different possible market arrangements...

...But only collective action by an informed public —in this case, legislation mandating the provision of such information—could overcome the inevitable political resistance of most businesses to providing it...

...This means that we see positive virtue in democratic participation —as a good thing in its own right, as well as a check on injustice and abuse of power...

...One might well make a case, on grounds of efficiency, for marketizing certain aspects of public administration—say, by seeking bids from outside contractors for administering the payroll of the police and public prosecutors...

...Populist values would best be fulfilled here, not by suppressing market activity, but by invigorating markets that serve consumer interests...

...Our vision of the good society is to some extent inevitably sociable—which is to say, holistic...

...Similarly, the cost of milk to American families derives largely from state-mandated minimum prices that are guaranteed to producers...

...Of course, the beneficiaries of these anticompetitive practices see larger social purposes in their privilege—ensuring high quality standards in physician training, or preserving "the family farm" in milk production...

...In this view, the well-being of any one citizen is of no legitimate concern to any other, provided only that each individual makes his or her own way without interference through life's maze of market transactions...

...But how much pain—and whose pain— should we be prepared to count against any gains that might be expected from markets...

...Thus, the fact that "marketization" in our current political climate often represents a Trojan horse for inhumane, anti-egalitarian policies hardly means that markets must always operate in this way...

...It implies that everyone must enjoy at least enough leisure and peace of mind—including a basic level of material wellbeing —to be able to pay a modicum of attention to the public weal...

...It is simply much easier for retailers to find out about consumers than it is for the latter to inform themselves about retail products...

...True, such a bold free-enterprise measure would inject new dynamism into lawenforcement activities...

...In these respects, then, our differences from thoroughgoing market ideology are profound...

...Ideologies offer us plausible descriptions of the world and purport to explain why it is as it is—while, simultaneously, surreptitiously exhorting us...

...Most thoughtful observers accept that many important forms of allocation cannot be marketized without doing violence to their very logic...

...Market relations—it should be needless to say—do not necessarily foster such conditions...

...Instead, we should be debating what kinds of things ought to be marketized, and—above all—what institutional form the markets we do favor should take...

...For that matter, it would surely help reduce the expense of government, making it possible to administer justice at a profit...

...Under specific circumstances and for specific purposes, markets are vastly more potent than alternative arrangements for getting certain things done...

...How do we define what is lost when market thinking goes unchecked...

...But even before the negative example of the Soviet collapse, evidence of the relative strength of market economies versus their centrally planned competitors was becoming apparent...

...Essential values of the democratic left inevitably run on a collision course with full-blown market ideology...

...national defense must be attended to...

...Ideological notions are relentlessly tendentious...

...The reason why we consider such a project bizarre is simply that it would lead to precisely the opposite of what we understand as "justice...

...This frame of mind can open the way for all sorts of projects ultimately destructive to key values of the left...

...DISSENT / Winter 1998 35...

...And where are the "efficiencies" of markets simply a formula for a faster journey on a trip that no one should want to take in the first place...

...0UR CASE is easiest against the most extreme forms of market ideology—those associated with libertarian politics, for example, or (more academically) the Chicago School of economics...

...It offers a vision of markets not just as efficient arrangements for coordinating complex activities but as a master design for all human affairs...

...But our opposition should stem from the destructive human consequences of these arrangements, not simply from the fact that markets are invoked to bring them about...

...So much for collective responsibility...

...Such realizations point to something essential: markets are created by the wills and activities of real-life human beings...

...Market ideology plays precisely this role in our own time...

...If such outcomes result from informed market exchanges, and no one is coerced, the libertarian sensibility is satisfied...

...This is the consumer credit reporting system, an industry that sells information on "private" citizens' credit histories and ability to meet future obligations...

...This is the outlook that would welcome the adoption of babies by auction, on the assumption that those with the strongest interests in being good parents will make the highest bids...

...the weak or unlucky need a helping hand, especially in situations where they have little to offer on any market...

...Positive cases included stunning spurts of market-driven growth in hitherto poor countries —notably Taiwan, South Korea, and Singapore...

...The willingness of workers to accept such innovations may just have something to do with their confidence in protections provided by the Dutch welfare state...

...The point is rather that for certain economies at a certain historical juncture, specific market arrangements have afforded dramatic growth...

...The Market" doesn't exist, even as a useful abstraction...

...Instead, we need tough-minded inquiry as to what sorts of market (and nonmarket) arrangements are likely to best serve the values and principles that we cherish...

...These views do not simply extol the virtues of market arrangements in specific settings...

...An artistic heritage may need to be preserved...

...But one of these countries is Holland, with one of the lowest unemployment rates in Western Europe...

...This fact points to an even greater chasm between our position and that of market ideologues —regarding the guiding view of the "Good Life" or the "Good Society" For our opponents, that vision is a negative one...

...It's not just that these elites hope to pocket a piece of the investment action in their countries, though certainly many do...

...Downsizing an organization may help the bottom line in the short run...

...But, as Robert Kuttner points out in his excellent Everything for Sale, organizations also depend on the loyalty of their staffs...

...Sometimes, in other words, economic institutions fail in their own terms, and that failure has to be recognized...

...The proper task of the democratic left is hardly to oppose market relations categorically...

...But market thinking need not always play that role, and it is our job to make sure that it doesn't...

...I am convinced that market arrangements may often be made to serve humane values—efficiency among them...

...There will always be tension between the advantages offered by market arrangements and the inegalitarian tendencies often generated by them...

...But it does require that all members of the community share access to the basic resources necessary for meaningful democratic participation...

...The best advice I can think of for such evaluation has an ad hoc, seat-of-the-pants quality: FIRST, DON'T believe everything you hear about the superiority of markets in all matters...

...One of the causes of that world-historic transformation was the inability of the Soviet command economy to compete with the dynamic, marketoriented economies of the West...

...Yet no recounting of such market-friendly narratives can justify the sorts of ideological conclusions that one often hears—that if some market arrangements are good, more must always be better...

...Second, when it comes to jobs and income, the weak deserve far more protection from market forces than the well-to-do...

...There is no reason why the left should acquiesce to such measures, any more than we should condone policies of political repression or ethnic discrimination or destruction of what ought to be the next generation's environmental legacy...

...Relaxing environmental constraints on logging may make the local woodproducts industry more competitive in the short run...

...Only economic growth can supply the technological and military power indispensable to make a country count in today's geopolitical calculations...

...This is a far more insidious idea than the thoroughgoing vision of All-Life-as-a-Giant-Market...

...Plenty of countries in the first category—from Bolivia to Burma—were as poor as South Korea and Taiwan in the 1960s, and have stubbornly stayed that way...

...At some point, Moscow obviously could simply no longer afford its increasingly desperate efforts to replicate the economic performance of its Western rivals...

...So, market arrangements are urgently sought after, even by those regimes that find them unnatural political bedfellows...

...Often the global marketization of industrial production works to suppress jobs held by the most vulnerable workers in highwage countries...

...The point is especially dramatic in some direct comparisons—Taiwan versus the People's Republic of China, South Korea versus North, West Germany versus East...

...There is nothing anomalous about seeking to protect the weak from the full blast of market competition while casting a skeptical eye on claims for similar treatment for the comfortable...

...It would be hard to overestimate the geopolitical repercussions of these dramatic spurts of market-driven growth...

...As with many another ideological vogue, today's ascendance of market thinking is easily traced to key events in the times of its origins...

...This may mean job retraining, grants to move staff to new places of employment, or countless other forms of social support that may not have immediate market justification...

...It requires, for example, that all citizens be provided with the tools—in terms of learning and information—to participate in public debate...

...Even in our era of market euphoria, few will embrace this view of the market as absolute arbiter of social destiny...

...What limit can be set, what principle applied to the extension of marketization that is consistent with the kind of world we want to build...

...But the spirit of democracy, we hold, remains unfulfilled if its processes are dominated by the few with resources of time, money, and information unavailable to the many...

...Sometimes a particular enterprise, or a particular technology, or even an entire industry, cannot continue to produce things that people want at a price that people can afford...

...At their most powerful, ideologies are vague and subtle enough to make the image of the world that they convey seem almost unexceptionable...

...Instead, we need to take a strictly instrumental attitude toward market relations: When and how will any particular market arrangement serve, or fail to serve, the sorts of democratic and egalitarian values of social participation that we consider fundamental...