Samarkand iktisodiyot va servis instituti

LESSON 8. THE RISE OF MARKETS IN PERSPECTIVE. ENVIRONMENTAL ISSUES.

Ilova 2

Back in the Middle Ages, markets developed spon­taneously. "You have something I want; I have something you want. Let’s trade" is a basic human attitude we see in all aspects of life. Even children quickly get into trading: chocolate ice cream for vanilla, two GI Joe dolls for a ride on a motor scooter. Markets institutionalize such trading by providing a place where people know they can go to trade. New markets are continually coming into existence. Today there are markets for baseball cards, pork bellies (which become bacon and pork chops), rare coins, and so on.
Throughout history societies have tried to prevent some markets from operating because they feel those mar­kets are ethically wrong or have undesirable side effects. Societies have the power to prevent markets. They make some kinds of markets illegal. In the United States the addictive drug market, the baby market, and the sex mar­ket, to name a few, are illegal. In socialist countries, mar­kets in a much wider range of goods (such as clothes, cars, and soft drinks) and activities (such as private business for individual profit) have been illegal.
But, even if a society prevents the market from operat­ing, it cannot escape the dynamic laws of supply and demand. If there’s excess supply, there will be downward pressure on prices; if there’s excess demand, there will be upward pressure on prices. To maintain an equilibrium in which the quantity supplied does not equal the quantity demanded, a society needs a force to prevent the invisible hand from working. In the Middle Ages that strong force was religion. The Church told people that if they got too far into the market mentality if they followed their self-inter­est they’d go to Hell.
Until recently in socialist society, the state has pro­vided the preventive force and in their educational system socialist countries would emphasize a more communal set of values. They taught students that a member of socialist society does not try to take advantage of other human beings but, rather, lives by the philosophy "From each according to his ability; to each according to his need."
For whatever reason—some say because true so­cialism wasn’t really tried; others say because people’s self-interest is too strong the "from each according to his ability; to each according to his need" approach didn’t work in socialist countries. They have switched (some say suc­cumbed) to greater reliance on the market.