In a time when supposedly nothing is taboo and anything goes and everything is up for re-evaluation, it's as close to an untouchable taboo catechism as there is in current times: Markets (by which I refer to the formal economic institution of markets) are awesome. Markets are efficient. Markets can do no wrong. Markets are the greatest economic system humans have created, and ever will create. Markets are the best thing since sliced bread and multiple orgasms.
And yet, with just a little bit of effort reading around, I've found how this market mythology is grossly wrong. In my "spare" time over the years, I've looked at dissident literature regarding economics, and I've found what seem to be some considerable problems with markets as a formal institution, and a reason why markets — the institution comprising rivalrous buyers and sellers — are fraught with problems. I can even make a list of ten problems with markets.
"The Political Economy of Participatory Economics", a book by Michael Albert and Robin Hahnel, lists some of the problems with markets. I include the reasons outlined in their book as the first five reasons in my list:
1. Commodity fetishism: Let me quote from the definition that Albert and Hahnel provide:
The ABC's of Political Economy." In a passage on public goods, he writes:
8. Markets ignore externalities: A market only takes into account the immediate effects of the transaction between the buyer and the seller. Any other effects resulting from the transaction are considered "external", and ignored in the costs of a market. Hence, these effects are called "externalities". It's a big problem, for two reasons: Reason one: Externalities, as Michael Albert put it in his book "Parecon: Life After Capitalism", "are the rule rather than the exception", and he quotes the economist E.K. Hunt who says "most of the millions of acts of production and consumption in which we daily engage involve externalities". Reason two: Despite being ignored, externalities skew the cost in a market, thus leading to snowballing effects that might not be so easy to ignore (I'm looking at you, anthropogenic climate change). Some reformers have raised the call for a true valuation of those externalities, except that those costs are notoriously difficult to gauge in a market.
9. Markets tend towards monopoly: Let me quote a brief passage from Robert McChesney's excellent book "Digital Disconnect", in a section where he discusses monopolies: "The dream scenario [for a capitalist] is to go to market and discover that you are the only one selling a product for which there is demand. Then you can set the price, not have it determined for you. This greatly reduces risk and increases profits. That is why so many of the great fortunes have been built on a foundation of near monopoly." At the same time, "pure monopoly…almost never exists. Instead, capitalism tends to evolve into what is called…oligopoly" and "the price in an oligopolistic industry will tend to gravitate toward what it would be in a pure monopoly[.]" I recently interviewed Bob McChesney for a radio show I produce, asking if he could provide any examples of markets that don't tend toward monopoly, the example he mentioned was "hot dog vendor at a football stadium" where the barrier to entry is low and the profit levels are modest. But for the large scale industries with sweeping levels of profit, this tendency towards monopoly holds.
10. Markets spawn corporations: Let me quote a passage from a presentation I gave: