Wednesday, September 30, 2026

What makes a market

 In the most basic village-produce-market sense, a market should enable:

  1. Buyer and sellers to congregate 
  2. Product comparison
  3. Competitive Pricing

Lacking any of those, and you don't have a market. 

There have to be multiple buyers and sellers. Monopoly/monopsony are classic market failures--a single seller can rise prices and lower quality without limit, while a single buyer can lower wages and prices without limit. Congregation has to take place in both place and time. One buyer per day is just a series of monopolists. Likewise, an entire convention center full of stores of unlike products is not a market--it's just collection of monopolists [1]. And prices have to be competitive--a group who has come together to set prices is called a cartel [2]. In the early medieval ages [3], there is an immediate return of 'market days' (for perishable commodities like foodstuff) and 'trade fairs' (for industrial commodities like wool) [4]. 


[1] Retail centers are deliberately set up this way, so that there are never two of the same type of store/restaurant/service, lest competition between the two drive down prices. 

[2] Unless it's a cartel to set the price of labor, in which case we call it a union. <grin>. But almost all unions emerge in a response to a monopsony on the purchase of labor--people won't suffer the costs (union dues, lost income) easily. 

[3] As soon as it becomes reasonable safe to travel and commerce returns. Crime (Banditry and piracy) drops to a reasonable level. 

[4] Places without which are reliant on peddlers, door-to-door salesmen who are crazily inefficient, but able to function because they can extract high prices by being a mobile monopoly. They are also afflicted by 'buyers' and 'agents' why are mobile monopsonists. 



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