CHAPTER VII.
THE MARKET.
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The capitalist market has no definite place, form or time. It is everywhere in the world, and goes on all the time. It is anywhere anything is sold or bought, where deals and contracts are being made and profits or losses are produced: the markets, the stock exchanges, shops, bars and restaurants, boardrooms and bedrooms. Anybody in the world who wants to buy anything at all, and has the means to pay for it, will find his counterpart: somebody who is eager to satisfy those needs and wants for a price and profit.
In this capitalist market most people are buyers and sellers at the same time. The market is not really a place people are the real market; People who are potential customers and traders because they have something of value to each others to exchange. This excludes the poor people of the world whose work is not needed, and, consequently, are pushed aside or ignored.
Therefore, in the context of capitalist economy, the market consists of those people or countries that have the means to pay for commodities and services, or that have anything else of value to the capitalists that can be exchanged for those commodities and services and produce a profit. Their demands can be satisfied because they have the means to pay. This is what capitalist economists call the "effective demand", opposite to the "absolute demand" which includes those who cannot pay and for this simple reason cannot be satisfied.
Our fashionable 'dry' economists only consider the "effective" demand in the market. Poor individuals and poor countries cannot be considered to be a market in the capitalist sense. They are the beggars outside the scope of capitalist production, and they will stay so, dependent on charity, until the capitalist may find in them something of value to himself by which he can make a profit.
This is the first reason why, while Capitalism today can overproduce, over-supply and over-satisfy the effectual demand of those who are already rich, it cannot satisfy the absolute demand of the poor and unemployed people of the world. Rather than give the surplus products away without a profit, it is forced to cut down production or to waste its productive forces in some other way.
It cannot be stressed too much how important the market is to the capitalist in the spiral of production. All the profits flow from the market. This importance is reflected in the status and the salaries of marketing and advertising managers and consultants in the hierarchy of capitalist business; they seem to be more important than scientists, engineers and production managers. Production is subject to the "effective" demand of the market.
The market has evolved naturally from the needs of Human society. In primitive economies, people traded their products and wares by direct barter. In the more complex economies, money is used to facilitate trade, and money represents the value of the commodities produced. Therefore, the use of money in trade is still in essence a more practical form of barter.
In the early stages, money was itself a commodity: something that was of general and practical use and in great demand, like metals, cattle or salt, their value being easily related to the value of other commodities.
Money is a Human invention, a product of our ingenuity. But in our mercantile socioeconomic system the early concept of money has been perverted. We think of money as something above everything in life, not just as a medium to facilitate trade. We have become so much enslaved by our own invention that we have lost our sense of perspective, even to the point that in a rich land people may be forced into idleness and poverty because there is no money, we must mortgage our souls and birthright to borrow it.
To suit the interest of a minority, money, a useful medium that facilitates production and exchange, has been turned into a commodity the most important commodity of all, even more important than labour.
This is an illusion, but we believe so much in this illusion that it has become a reality. Like a psychosomatic illness it is all in the mind, but its results and effects are real and devastating.
For over three centuries we have been gradually conditioned to accept as the law of Nature the peculiar logic of the merchant class, a minority in our society, and by blindly following this logic we have gone past the limits of rationality. The direction of our economy has been determined by the preposterous pretence that for our own good everything must be subjected to the law of the merchant. We are trapped in a deadly game of make believe in which the merchant makes the rules. World bankers today are not trembling so much for having to lose their loans to the developing nations, but more because of their fears that their trick of confidence may be found out, and their irrelevance may become manifest.
It is unfortunate and also tragic that we may never find a rational solution to our present problems. How can a generation of Human beings, born and bred in a madhouse environment, recognise sanity and common sense? For the transient and doubtful benefit of a section of society who unconsciously has promoted the mercantile concept of money, we are now sacrificing entire generations. And those wretched people who have no money at all are often the most fanatic believers in this illusion.
There is a passage in Adam Smith's "The Wealth of Nations" that capitalist economists have forgotten:
".....the real price of everything,....is the toil and trouble of acquiring it....What is bought with money or with goods is purchased by labour as much as what we acquire with the toil of our own body. That money or those goods indeed save us this toil. They contain the value of a certain quantity of labour which we exchange for what is supposed at the time to contain the value of an equal quantity. Labour was the first price, the original purchase-money that was paid for all things. It was not by gold or by silver, but by labour that all wealth of the world was originally purchased....."
In the feudal system the market was regulated and strictly controlled, but, as capitalism developed, a free enterprise market began to take shape.
Unfortunately, the ideal of free competition in a free market, that Adam Smith defined and advocated in his analysis of Capitalism, could never become a reality. Greed, ignorance and fear have been too strong, and free competition without restraints (?!) inevitably leads to confrontation and war.
In the good old days of free enterprise, during the Industrial Revolution, the law of the jungle took over: the strong and powerful took all the freedoms, and the weak were enslaved or destroyed.
Given the dynamic nature of competition, a free market cannot remain free for very long. It is a contradiction, and it will remain an illusion.