The idea of the market has an ephemeral quality. It is shockingly materially real but also almost incomprehensibly abstract. While a local market can articulate something close and immediate, the ‘free market’ evokes almost theological grandeur, invested with the incredible powers of economic management. That is, to process the input and demands from individuals, businesses, organisations, states and economic unions. Indeed, it is at the heart of the world economy. The beating heart of capital itself. We are, therefore, perhaps right to treat it with some awe, even if it distorts. Something of a conceptual history is in any case appropriate, to demystify the historically determinant nature of the market, from the local marketplace to the global walled-off garden it has become.   

Perhaps not surprisingly, the word ‘market’ is derived from the Latin ‘mercatus’, literally a marketplace. This marketplace has historically tended to be focused on an urban form, as it was in Roman practice. There it acts as a local site of exchange and consumption. Though economically and socially crucial, this form of market is still quite immediate and clear. Its function is primarily to sell the surplus crops and stock of agricultural producers, and to acquire necessary tools and goods, and some luxuries one did not produce. Here we do not see any market forces as such, as things are either not produced with profit-maximisation in mind, or in small enough quantities that the expected demand is quite clear. 

That said, there is a clear distinction between the sort of municipal market described above, and its regional equivalent. As we find in Karl Polanyi’s highly influential The Great Transformation, large regional, foreign markets were historically the only ones for which notions of ‘supply and demand’ can be said to apply, primarily in luxury goods for elites. Of course, this has varied quite a bit. Both in scale and complexity, depending on time and place. Foodstuffs after all often featured as part of large regional trading networks, for example the sixteenth century Netherlands imported grain from Eastern Europe in large quantities. Others, such as the sprawling networks that constituted the silk road traded of course in huge array of goods. Significantly, the profit from such exchanges was not at the point of minimising costs of production, rather the simple formula of buying cheaply in one place and selling dear in another was applied. However, as Polanyi insists, these regional trading systems of the pre-capitalistic world only tied together local, municipal markets. Moreover, these inter-locking networks did not take truly global form until the enforced incorporation of the Western Hemisphere in the early sixteenth century, following the beginning of Spanish and Portuguese colonialism. Peruvian silver started to be imported by the Ming Dynasty in exchange for Chinese luxuries like silk, porcelain and tea, to be traded further across the Indian Ocean trade network and eventually back to Europe. However, while a global market system can be traced back, it lacked the crucial development of the national market.  

The formation of the modern market structure is a debate that is highly interlocked with the debate on the formation of Capitalism. After all, while Capitalism cannot be reduced to merely the presence of market forces, it is a fundamental component. Like any enduring debate, there is much disagreement to survey. A dominant formulation, with origins back to Adam Smith and the Scottish Enlightenment, understood capitalism, ‘the commercial society’ as it was called then, as emerging out of humankind’s natural proclivity for industry and improvement. This inherent tendency developed to new hights when enough primitive accumulation had been gathered, such as the super-profits from the Americas, alongside a sufficient degree of urbanisation. Versions of this formulation continue to be prevalent in public imagination, academia in the form of the ‘demographic model’, and even in Marxist historiography. However, an interesting current of opposition has emerged from the Marxist historian Robert Brenner in the 1970s. He was sceptical of the assumption that Capitalism is a pre-existing inclination lying in wait to be actualised, stressing instead specific circumstances and a focus on its agrarian origins.  

For the purposes of understanding its relation to the market, Ellen Meiksins Wood’s work The Origins of Capitalism, following in Brenner’s trail, is particularly helpful. She argues the crucial break lies in the formation of an integrated national market, whose forces creep into the very means of life, the access to food. This was the result of historically specific developments in England, where an agrarian capitalism based on the model of landlord-tenant-labourer took an increasingly solid form from the Late Middle Ages onward. The result being the price of wheat and other food, and hence the access to it, became determined by market forces in a national market centred on London. The market therefore went from a voluntary site of profit, primarily through transportation, to a demanding form one is forced to operate within. For though the market had caried foodstuffs long distances before, it was never quite compulsory, never chaining the whole system to fluctuating prices. This new national market structure continued to expand as other states had to confront English economic power, eventually resulting in an interlocking world market, connecting the national ones together, as the trade networks had the municipal markets of old. Indeed, as Quinn Slobodian notes, the adjective ‘world’ – as in world economy, world literature and world history – rapidly increased in use in the 1920s, alongside the concept of ‘nation’. They did hence in large part emerge together. 

It should therefore be reiterated that there is no historically transcendental market form. Rather, more than just in terms of power, reach, and scope, the capitalist market proves to have another novel feature. That being an antagonism to the social. This has been the focus of Social Reproduction studies, which noted before Polanyi that a conflict between ‘economy and society’ has emerged. During the era of Liberal Capitalism before 1914, this took the form of a crisis of working-class families, impressing women and children into the workforce. This feature persists today with increasing demand on time for work and education, with the increasingly severe neglect of familial and community care, social ties, and mental health.  

Another antagonistic feature, that is both particular and quite general, is its relationship to politics. It is admittedly hardly new. For example, in Britain, the right to hold markets, and what kind, was a privilege granted by the crown to specific towns and individuals. Regarding the mature capitalist variant, the key political struggle has been the extent and nature of its regulation and restriction, at times even its existence. However, even this has conceptually been a shifting terrain. A key shift was the triumph of the neoliberal conception of the market economy and its relationship to the state in the 1970s and 80s. As Slobodian has argued, it is not so much a ‘market fundamentalism’ of the old liberal era, a conception originating indeed from Polanyi, but the perceived need to wall the market off from political influence. He argues this negative theology of the market as a fundamentally unmanageable force was inspired by the philosopher Carl Schmitt’s notions of ‘imperium’ and ‘dominium’. The former being the realm of the state and the political, whose role is to guard and cultivate the economic realm represented by the latter. The state is therefore not removed from the equation, as the term ‘free market’ might imply, but merely acting as a hands-off gardener, putting the conditions in place so the economy can grow, while warding off any weeds or parasites.  

The already highly abstract nature of the modern market, national or global, has made it even easier to separate from the political. That is isolate it from democratic oversight and demands. Slobodian notes the role the World Trade Organisation (WTO) in this, formed in 1995 to manage the discontent of post-colonial states. However, as he points out, by giving these relationships and forces a concrete shape, it reveals the lack of democratic legitimacy at the core. We can also ponder over super-national economic unions, like the European Union, and their role in this. In many ways, the EU has succeeded in removing enduring tensions, such as state monopolies and monetary policy from the hands of more democratically accountable member states. Instead, sealing them in the walled garden of ministers, commissioners and economists, whose European Parliament lacks even the power to initiate its own legislation. Regardless of these measures, a popular wish to have a say in the economy which governs one’s life will endure. The neoliberal project therefore remains unfinished, incomplete and unstable. If nothing else then, a walk in a farmer’s market gives one an uncanny resemblance of what the walled-off garden might have as originated as, though of course, it is lurking ephemerally in the background there as well.  

Written by Inge Erdal

Bibliography:  

Bhattacharya, Tithi (ed.), Social reproduction theory: remapping class, recentring oppression. London: Pluto Press, 2017.  

Polanyi, Karl, The Great Transformation: The Political and Economic Origins of Our Time. New York: Farrar & Rinehart, 1944. Reprint Beacon Press, 2001.  

Slobodian, Quinn, Globalists: The End of Empire and the Birth of Neoliberalism. Cambridge, MA: Harvard University Press, 2008. 

Streeck, Wolfgang, How Will Capitalism End? London: Verso, 2016, Chapters 5 and 7.  

Wood, Ellen Meiksins, The Origins of Capitalism: A Longer View. New York: Verso, 2017.