2 ms·

Very little from the ancient or medieval markets fit into the current free-market discourse. For example, it's a very common misconception to think that prices

by nabla9 5y ago

Very little from the ancient or medieval markets fit into the current free-market discourse. For example, it's a very common misconception to think that prices would be freely determined by supply and demand before modernity (price determination was very situational). Ancient societies had a very clear idea that inequality of bargaining power could lead to exploitation and destroy societies. "just price " does not exist in modern economics, but it was essential for ancient societies, even before ancient Greeks mentioned it. The quality of the product was an important determination for price. The seller could ask more if the product was fresh or well made. If the trader was seen exploiting scarcity to make excess profits was considered unethical and there were laws against it.

QuesnayJr 5y ago
Common misconception among who? Certainly not free marketers -- the classical 19th century argument is that if prices don't equalize supply and demand, then you get unmet supply or unmet demand. Or, you get the state using force to compel supply or depress demand. Look at what happened after the Black Death. In Western Europe you get wage increases. In Eastern Europe, where the aristocracy thought this was unfair, you get serfdom. When John Stuart Mill (who first clearly articulated the idea of supply and demand) said that supply and demand should be allowed to determine labor supply in the West Indies, Thomas Carlyle declared that economics was "the dismal science", and called for bringing back slavery. Look at Diocletian's "Edict on Maximum Prices", which set maximum prices in response to currency debasement. Did it work? The consensus seems to be "no". The idea of inequality in bargaining power is Econ 101, which introduces a whole plethora of terms for the phenomenon -- monopoly, monopsony, oligopoly, oligopsony, market power, etc.

by nabla9 5y ago

QuesnayJr 5y ago

Common misconception among who? Certainly not free marketers -- the classical 19th century argument is that if prices don't equalize supply and demand, then you get unmet supply or unmet demand. Or, you get the state using force to compel supply or depress demand. Look at what happened after the Black Death. In Western Europe you get wage increases. In Eastern Europe, where the aristocracy thought this was unfair, you get serfdom. When John Stuart Mill (who first clearly articulated the idea of supply and demand) said that supply and demand should be allowed to determine labor supply in the West Indies, Thomas Carlyle declared that economics was "the dismal science", and called for bringing back slavery. Look at Diocletian's "Edict on Maximum Prices", which set maximum prices in response to currency debasement. Did it work? The consensus seems to be "no". The idea of inequality in bargaining power is Econ 101, which introduces a whole plethora of terms for the phenomenon -- monopoly, monopsony, oligopoly, oligopsony, market power, etc.