Markets Proceeds from State Coercion

Discussion

Sam Bliss and Megan Egler:

"Formalist economists assume that humans are innately self-regarding rational calculators, such that institutional development toward market society was a mere refining of preexisting propensities to trade in pursuit of gain. This assertion is not substantiated and its premises are faulty (Kahneman, 2011; Levine et al., 2015; Sober and Wilson, 1998; Urbina and Ruiz-Villaverde, 2019). Substantivist economists, on the other hand, hold that social organization and ecological context shape economic systems. For them, people make market (and non-market) institutions to meet their needs within, and in response to, political and biophysical processes (Kapp, 1954). Ecological economics is largely substantive economics (Gerber and Scheidel, 2018).2

Those who, in this substantive tradition, trace markets' origins to the dynamics of history tend to find that elites create conditions that coerce common people to construct and participate in markets. Heinsohn (2009); Heinsohn and Steiger (2013) argues that indebtedness forces property owners, whose titles are on the line as collateral, to start selling things in order to pay back principle plus interest. Where formal property rights are absent, he notes, so are markets. David Graeber (2011) writes that markets materialized as early empires expanded. City-states would requisition grain or produce it on royal estates to feed their militaries, conscripted labor, and palace complexes (Polanyi, 2014b; Scott, 2017), but in far-flung occupied territories this became administratively difficult. So, states started paying their armies in, say, silver and then demanding that conquered subjects pay a tax in silver. This turned whole colonized economies into machines for provisioning soldiers via markets (Graeber, 2011). These accounts emphasize different parts of the same story: ordinary people, left to their own devices, do not seem to spontaneously establish or exchange in markets.

Once markets exist, Karl Polanyi (1944) teaches us that they remain regulated and auxiliary, subordinated to—or “embedded” in—other social institutions that govern economic life, until states forcibly turn land and labor into commodities through enclosure and dispossession. It is only when states take away people's means to produce their own necessities and destroy non-market institutions for distributing them that propertyless people must work for wages with which to purchase their basic needs (Murton et al., 2016). Powerful actors who stand to gain from markets' existence have enacted policy to grow them from non-existent to marginal to dominant economic institutions.

Intellectuals have contributed to creating this market society (Polanyi, 1944). Political and economic theorists omitted the existence of non-market economies from their accounts of human nature and history (Goodfellow, 1939; Hobbes, 1651; Smith, 1776). They urged the establishment of markets for land and labor in order to discipline the poor and organize society in service of industry (Malthus, 1798; Ricardo, 1821). In theorizing and promoting an all-encompassing self-regulating market system, classical economists began the formalist tradition of studying the economy as if were to consist only of production for and exchange in markets. Much neoclassical economics continues this tradition today.

Ecological economists and our predecessors have focused attention on the extra-market processes from which the market economy extracts work and onto which it exudes waste, namely ecosystem functions and the unpaid labor of women, slaves, and colonies (Kapp, 1950; Martínez-Alier, 2002). Yet in the first 30 years of ecological economics, we have not systematically studied the non-market economies that form the fabric of material existence for human societies outside of capitalism. Nor have we often studied non-market economies in capitalist societies as legitimate economic institutions in their own right. If we care about justice and sustainability (Daly and Farley, 2004), it matters that the most egalitarian (Graeber and Wengrow, 2018; Power, 2018) and lowest-throughput (Haberl, 2001) societies we know of do not have markets. One might hypothesize that people in modern societies are more likely to treat each other as equals or distribute goods and bads fairly in non-market relationships, or that we tend to act with ecological frugality in non-market production. We elaborate each of these points with evidence and research questions in 3 How to Study Non-Market Economies: The Case of Food, 4 Concluding Remarks: The Social (De)Construction of Market Society.

Non-market economies could support the goals of ecological economics as an intellectual project. But we have to study to them to know where and how so."

(https://www.sciencedirect.com/science/article/pii/S0921800919312868)