the behavior of market in ordinary commodities?

[nurulsyuhada]

the behavior of market

[linjenn]

Some stuff here, but check out the following link.
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7.5 Market Roles and Incentives
According to the traditional paradigm, markets economize on unneeded information. Our new paradigm sees them as deleting information critical for self-managed, solidaritous decision making. The traditional paradigm celebrates the motivational miracle of competition that supposedly harnesses egotism and greed for socially beneficial tasks. Our new paradigm helps elucidate how market roles undermine cooperative behavior and relationships built on mutual respect and solidarity.

Markets simultaneously require competitive behavior and prohibit cooperation (not to be confused with collusion) as irrational by creating a direct opposition of interests between seller and buyer. The interest of the seller is to sell a-good or service that is least troublesome to provide at the highest possible price. The interest of the buyer is to buy the most beneficial good or service at the lowest possible price. Since "least troublesome" seldom coincides with "most beneficial" the opposition of interests is complete over both the good or service exchanged and what is paid for it. In market exchange, neither party can afford to be concerned with the needs and desires of the other, except in a mercenary sense. To be concerned with the well-being of one's "partner" in exchange undermines the functioning of the market mechanism. To put it starkly, market allocation establishes a war of each against all.

It is interesting that markets' greatest critics and admirers have agreed on this point. While the critic writes:

Every product is a bait with which to seduce away the other's very being, his money; every real and possible need is a weakness which will lead the fly to the gluepot ... every need is an opportunity to approach one's neighbor under the guise of the utmost amiability and say to him: "Dear friend, I give you what you need, but you know the conditio sine qua non; you know the ink in which you have to sign yourself over to me; in providing for your pleasure, I fleece you." 38

The admirer concurs:

It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard for their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantage. 39

Market competition motivates economic effort based on self-interest, not concern for others who are similarly concerned for you. Market competition forces people to think of ways to take advantage of others they buy from and sell to and with whom they compete for suppliers and buyers. In sum, market roles require participants to practice antisolidaritous behavior on a daily basis, which cognitive dissonance then translates into consciousness. And while solidarity is expressed by the maxim "do unto others as you would have them do unto you," market competition expresses the maxim "do in others before they do you in."

Karl Marx summarized the problem succinctly over 130 years ago when he wrote that those who wanted markets in socialism want competition without the pernicious effects of competition. 40 More recently Gar Alperowitz; pointed out that "as long as the social and economic security of any economic unit is not guaranteed, it is likely to function to protect (and out of insecurity, to extend) its own special status-quo interests--even when they run counter to the broader interests of society." 41 But this is precisely the situation a market system creates. Under market competition managers of plants that pollute-whether they be managing in the interests of stockholders or workers-dissimulate with good reason since pollution taxes and more ecological technology would lower profits. Managers of plants that create shoddy and dangerous products have an incentive to engage in deceptive advertising to preserve demand for their products. And those whose livelihoods depend on the automobile industry will continue to oppose changes they know to be desirable in transportation systems as long as market competition means they would bear the burden of the social costs of transition in the loss of income and dignity that comes from unemployment.

To generalize, markets systematically establish divergences between individual and societal well-being. They establish an incentive to pursue individual interest at the expense of social interest because they guarantee that the rest of society cannot be relied on to safeguard one's individual welfare. Markets create a kind of lowest common denominator consciousness. "Under market conditions a minority of the workers in an industryperhaps even one enterprise--can impose its preferences on all the rest." If one firm chooses to use deceptive advertising or lower the quality of the product in imperceptible ways, "all the other firms must follow suit-or find themselves driven out of business." 42