The Truth About Markets, Pillar of Capitalist Ideology
Have you ever wondered how markets work and why they are often celebrated as efficient and fair? Let’s take a closer look at the truth behind markets and their role in capitalist ideology.
Markets are institutions where goods and services are exchanged between sellers and buyers. They have existed throughout history, but their outcomes have not always been considered socially acceptable. Philosophers like Plato and Aristotle criticized and debated over markets, enriching the tradition of market criticism.
The market mechanism is simple: sellers offer goods or services, and buyers exchange something of value in return. When both parties agree on a price, the exchange is made, and products are distributed to consumers.
However, problems arise when buyers and sellers have different plans for what they want to buy or sell. If there is a shortage of an item, buyers compete, bidding up the prices. This discriminates against those with less wealth, as the poor cannot afford the higher prices. Employers, who control production and supply, often manipulate markets for profit, creating or sustaining shortages to raise prices.
Defenders of markets argue that rising prices signal to producers to create more products and tap into high profits. However, employers are aware of this and may not rush to increase production to maintain high prices and profits. As a result, sellers often raise prices, blaming it on rising costs, further contributing to inflation.
Capitalists have learned to profit by manipulating supply and demand, and capitalism created the advertising industry to boost demand. Industries also control supply through mergers, oligopolies, and monopolies. Markets are useful tools for capitalists to manipulate for profit, despite being celebrated as ideal pathways to efficiency.
Labor markets are also influenced by manipulation, with employers lowering wages and resisting minimum wage laws. Automation, outsourcing jobs, and hiring immigrant workers are other tactics used to control labor markets for profit.
In addition to product and labor markets, loans are another aspect of capitalist markets. Lenders and borrowers negotiate interest rates. Recently, however, the central bank of the United States, the Federal Reserve, has raised interest rates to combat inflation, affecting borrowing costs. The poorest and middle class are hit hardest by these interest rate hikes, while the rich tend to benefit.
The government could intervene to control inflation by implementing a wage-price freeze, as President Richard Nixon did in 1971, but market-fetishizing and neoliberalist thinking have come to dominate policymaking.
Capitalism has made markets widespread, but it has also given them an exaggerated ideological importance. As capitalism faces deeper troubles, it is time to challenge this ideology and work toward better institutions and a fairer system.
🔭 This summary was human-edited with AI-assist.
