Non-Market Economics

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= "Non-market economies encompass production not intended for sale and transfers other than buying and selling. They are economies without money." [1]

Description

"Non-market economics is the study of the production, trade, and distribution of goods and services via mechanisms other than the market, in other words using systems other than the Price system. Non-market economies do not operate through the exchange of money. Barter is usually considered a type of a commodity-economy, so it is generally not considered a non-market economy. This type of exchange is also called reciprocity. This includes unilateral giving such as gifts and bilateral giving, meaning a person gives a gift expecting to be repaid at some unspecified time.

The study of non-market economics is typically a part of economic anthropology. Among the founders of the discipline are Karl Bücher and Karl Polanyi." (http://en.wikipedia.org/wiki/Non-market_economics)


Discussion

Why to Study Non-Market Economies

Sam Bliss and Megan Egler:

"Ecological economists should research non-market practices and institutions for two set of reasons. First, because they are ubiquitous and indispensable in any economy. Historically, markets have taken hold only where elites impose conditions on ordinary people that make market relations imperative. Second, we argue that markets are inappropriate institutions in the contexts that matter most to ecological economists. Markets are better than any other institution for coordinating complex, dispersed, diverse networks to satisfy individual tastes, yet they frequently fail to fulfill the normative ends that ecological economics is founded on. We elaborate each of these points—the importance of non-market economies and the critique of markets—in turn."

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


Non-Market Economies are Vital

Sam Bliss and Megan Egler:

"Above, we stated rather emphatically that non-market production and transfers play fundamental roles in every economy. It is widely accepted that markets have been marginal institutions for most of human history. Most societies around the world have reserved market relations for dealing with foreigners and foes (Graeber, 2009; Sahlins, 1974). Like with stealing or violence, market transactions require almost no interpretive work and therefore facilitate exchange between strangers (Bowles, 1998; Graeber, 2006). After all, swapping things while trying to get the best deal is the way people interact with others they do not care about or expect to see again (Graeber, 2011). People from the same community or culture, by contrast, usually transfer goods and services through more complex institutions of sharing, reciprocity, or redistribution (Mauss, 1967 [1925]; Polanyi, 1944). Granted, these are generalizations. However, if they are generally true, how did markets come to dominate economic life in so many societies?

Different thinkers offer different explanations for markets' emergence and rise to supremacy. 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).

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)


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