The Market Revolution and Its Limits: A Price for Everything

The Market Revolution and Its Limits: A Price for Everything

The Market Revolution and Its Limits: A Price for Everything

The Market Revolution and Its Limits: A Price for Everything

Synopsis

Non-polemical in its approach, this book provides a comprehensive appraisal of the market and its alternatives, backed up with empirical international illustrations. By identifying the wide transaction area between market and plan, Alan Shipman concludes that the "revolution" to date lies less in recreating market outcomes than in redefining the market process, with large businesses playing a crucial organising role.

Excerpt

Soon after the Mexico World Cup, bright lights began appearing in the sky. Sometimes as a continuous, relentless red or white beam. Sometimes as a rhythmic flash or dancing on-off sequence. They belonged not to stray fireflies or unidentified flying objects, but to light-emitting diode lamps that ran forever on two small batteries. Cyclists and joggers used them to stay visible at night. Rural dog-walkers (who exemplified the separation of ownership from control long before economists identified it) tied them round collars to keep track of their canine charges in the undergrowth. Yuletide celebrants found in them a cordless alternative to fairylights. Another small invention had altered the landscape, giving suburbia something it never dreamt of and now could not live without.

A still more dazzling revelation, at least to viewers of the cold-war generation, was that much of this new enlightenment came from the People's Republic of China. Not Hong Kong, the legendary free-market enclave that had moved from cheap toys to sophisticated electronics in two generations, but from its stolidly communist neighbour, which now seemed set on achieving a similar progression in one. Where Mao's Great Leap Forward had stumbled beneath the weight of bureaucracy and brutality, the market's million small steps were adding up to something revolutionary. It was an unexpected message from the model to which many non-market hopes had turned when eastern Europe's 'democratic centralism' waned and 'African socialism' wilted before worldwide supply and demand. But by this time, the former Soviet Union was in full flight from central planning, its one-time satellites were staging the world's biggest privatisation, and even the 'mixed economies' of North America and western Europe were finding their public sectors ripe for scaling down.

Governments everywhere seemed to be finishing the century scrapping their price controls, shedding their trade barriers, shrinking their tax-and-spend ambitions and archiving their five-year plans. Soldiers, scholars and surgeons were being told to make their operations pay, and those without work to price themselves back into it. State spending to relieve deprivation and depression was being accused of keeping them alive, while the market could make good if only given the right incentives. the revolutionaries no longer had a price on their heads, but prices in their heads. Even redistribution's protective arm was pushed aside in the rush to unshackle the invisible hand.

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