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Ideas about markets and marketplaces of ideas?

September 30, 2013

Authored by: Lisa Herzog, postdoctoral researcher, Institut für Sozialforschung and Cluster “Normative Orders”, Goethe University Frankfurt, author of Inventing the Market: Smith, Hegel, and Political Theory, available via Oxford Scholarship Online.

Inventing the Market: Smith, Hegel, and Political Theory

What images come to your mind when you think about “markets”? Stock exchanges, farmer’s markets, auction houses? There are many kinds of markets, and together they shape the economic life of our societies. But markets are no natural kind; they are social institutions within legal and cultural contexts, where these contexts are influenced by the ideas of past thinkers. Thinking about the history of ideas is therefore a very fruitful approach for understanding markets.

Inventing the Market studies two historical authors in order to understand how they have shaped today’s ideas and institutions. Both are often misunderstood: Adam Smith (1723-1790) has the reputation of a cold-hearted free market radical. In fact, his account of markets is more nuanced than many think, being a subtle moral philosopher and observer of the manners and customs of market societies. The second is GWF Hegel (1770-1831), who has the reputation of being a grandiose but obscure metaphysician – a belief often hard to dispute! However, he is more than this, showing detailed analyses of the effects of markets on a society in his writings. Furthermore, while he agrees with Smith that markets are central institutions of modernity, he is more pessimistic about their effects, seeing a greater need for political intervention.

Comparing these two accounts helps to illuminate where our ideas about markets come from. But why would a philosopher do this? In the last decades many political philosophers have treated markets as “black boxes”, without analysing their normative structures. But, as Inventing the Market argues, the answers to core questions in political philosophy – such as the relation between individual and society, notions of freedom and justice, and the meaning of history – are co-determined by how we see markets. Take, for example, labour markets: do we see them as places in which individuals “sell” their “human capital”, or do we see them as places in which individuals have a specific identity as the baker, butcher, or brewer? And what does this mean for how we regulate labour markets, and for thinking about the ties that keep a society together? Chapter four, “The Self in the Market: Identity and Community” explores these questions. Traces of the differences between Smith’s and Hegel’s thoughts can still be found in today’s markets, for example between “liberal” and “regulated” market economies, as distinguished by Hall and Soskice in their “varieties of capitalism” approach.

I wrote the PhD thesis that led to Inventing the Market at Oxford University, whilst also teaching in Germany. I was, therefore, thrilled when I discovered Oxford Scholarship Online (OSO), as I could access the texts I needed remotely, from anywhere and at any time, even from the airport! I have now come to appreciate OSO for much more, and I see its search function and the possibility of discovering new books as wonderful tools for research. This is especially important in interdisciplinary research, where you draw on insights from different disciplines, as I do in my new project on ethics in financial markets. I am very happy that my own book has become part of this platform, which makes it easily accessible for scholars and students around the world – whether in libraries or in airport lounges!

Inventing the Market: Smith, Hegel, and Political Theory is available in print and through Oxford Scholarship Online.

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