First off, I want to say that so far, I like how McMillan
approaches the aspect of the market. It’s only been a chapter, but I already
get the sense that I will continue to understand thoroughly just exactly what
he means and the points he is trying to make. Now on to answering these
questions. Each question raised some interesting points that made me think more
about exactly what I was reading, so I hope that my answers make sense.
As far as
what McMillan finds to be defining characteristics, he starts out with the
obvious: a market exists when people want to buy and people want to sell.
That’s pretty much the simple, most point-blank way to put it. McMillan writes
that, “A market exists for something if there are people who want to buy it and
people who want to sell it” (McMillan 5). That’s pretty much exactly what I
stated before, but it implies that markets can exist for virtually anything,
provided there are buyers and there are sellers. As McMillan says though, this
is only the start, and it goes much deeper.
One of the
defining features is decision-making. McMillan writes that decision-making
autonomy is key, saying, “Participation in the exchange is voluntary; both
buyer and seller are able to veto any deal” (McMillan 5). He goes on to say
that both the buyer and the seller are not obliged to follow the orders of
others, making them the sole factors in deciding on a good or service.
Continuing
on that point, McMillan points out that any deal where someone lacks autonomy
is by definition, not an actual market dealing. Another feature is a sort of
freedom that comes along with this autonomy and the power to bargain, which as
McMillan writes, “…the opportunity to agree to an exchange or to decline it is
a kind of freedom. Some choice, even if it is narrow, is usually better than
none” (McMillan 6). Some of the other features include competition (which
McMillan actually states isn’t an actual feature, but rather simply adds to the
autonomy), and he also writes that markets are never ubiquitous. This means
that nonmarket activity is very prevalent. Finally, and the last thing I’ll
point out, is that McMillan writes, “No one is in charge of a market—or rather,
everyone is in charge” (McMillan 7). That is easily my favorite thing about
markets, the freedom to where everyone can make their choices.
I can
definitely see both sides of this aspect. On one hand, markets allow for the
seller to distort prices if they so choose. Granted, they may lose sales, but
for a good or a service that is increasingly rare, it allows the supplier to create
more wealth for themselves, and shuts out the people who really need the
product and can’t afford it. That’s a bad aspect of markets, but at the same
time, it allows for the seller and the buyer to participate in a mutually beneficial
agreement when both parties have good intentions. Personally, I’ve tended to
lean towards the belief that competition and markets are generally good things.
Even for those who may struggle within markets, I think that generally the
economy is large enough to allow for other opportunities (this of course, is
not a universal thought). I abhor the growing rate of inequality in the United
States, and some might say that markets could potentially breed inequality.
First let
me say, I loved this analogy because of my interest in sports, so this made
much more sense to me—another reason why I enjoyed this first chapter. Saying
that, I wouldn’t say that there are any
particularly more important rules, but I would say that taken all together, the
rules constitute something that needs to be respected and kept in mind in order
for the market to function properly. One of the things that I would point out
as a rule I would view as more important or something that I would like to see
more of, is more regulation when dealing with new products. Let’s not forget
that the housing market was absolutely ravaged by the mortgage-backed
securities, which were hardly regulated. I don’t think that it’s necessary to
infringe on big business too much, but definitely some of the newer products
need to go through some more inspection.
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