Public Market
A public market or simply market is where people engage in exchange of goods and services. A market is one of the varieties of systems, procedures, social relations and infrastructures. While earlier people used to exchange goods and services through a barter system, nowadays in most markets sellers sell goods and services (including labor) to buyers only for money.
In other words we can say that a market is process or system which helps in deciding the price of a good and services.
Even though trade occurs between two parties (buyer and seller), it is suggested that for perfect completion a market should have at least three parties. This way, competition will increase at least on one of two sides. Nevertheless, for a market to compete it is imperative to have multiple buyers and sellers.
One seller or few sellers and large numbers of buyers will result in a monopoly, unjustifiably raising the price of a good or a service. On the other hand, single buyer or few buyers and plenty of sellers will result in goods and services being sold at very low prices- a condition called as monopsony. However, in market economic, both these conditions are highly unlikely. These are perfect example of imperfect competition.
Market Types
There are different types of markets and various organizational structures to support their functions. Method of business transactions could also characterize markets.
Markets can be differentiated through size, form, geographical locations, demographics and types of goods and services sold.
Some of the examples include:
1- Physical Retail Markets: Physical retail markets are present almost everywhere. These markets are in form of groceries stores, super markets, shopping malls and local farms’ markets. Farm markets are typically found in town squares or parking lots on occasional basis or continuing basis.
2- Non physical Markets: e-commerce markets (eBay, amazon.com and hosts of other online trading platforms that bring buyers and sellers under one roof)
3- Ad hoc auction markets
4-Financial Markets: Stock Markets, Bond Markets, and other securities markets like mutual funds, ETFs.
Financial markets help exchanging liquid assets. Those assets/commodities which can be easily and quickly concerted in cash are called as liquid assets. Most investors favor investing in two markets, the stock markets and the bond markets.
Some of the famous stock markets include the New York Stock Exchange ( NYSE) The London Stock Exchange (LSE), The Amsterdam Stock Exchange( AMEX), and the NASDAQ.
Futures markets are where contracts are exchanged for the future delivery.
The money market is a comprehensive term which includes the global market for lending and borrowing.
5- The Intermediate Goods and Services Markets: Such markets make components or provide intermediate services used in production of goods and services.
6-Labor Markets: A labor market functions through the interaction between workers and employers.
7- Currency and Commodity Markets: Currency markets are used to trade one currency for another. Currency markets involve lots of speculation over an exchange rate of a particular currency with regard to another; example, U.S dollar Vs Euro or Japanese Yen Vs U.S. dollar.
8-Artificial Markets formed by regulation to barter rights for derivatives that have been designed to improving externalities, such as pollution permits, carbon trading
9- Illicit Markets for drugs, arms or pirated products.
In conventional economics, the concept of a market is any structure that brings together buyers and sellers to exchange any type of goods, services and information. Trading of goods or services for money is known as a transaction. Market participants comprise of all the buyers and sellers of goods who influence its price. This influence is the most important study of economics and has given rise to a number of theories and models relating to the basic market forces of supply and demand.
A market has two role players: buyers and sellers. The market helps carrying out the trade thereby enabling both the distribution and allocation of resources in a society. With the help of markets, virtually any tradable item can be appraised and priced. A market emerges more or less impulsively or is created intentionally by human interference in order to enable the transfer of rights of services and goods.
Historically, all types of markets originated in physical market places which eventually developed into towns, small communities, and cities.
Market Place
A marketplace is the space, actual, virtual (e-commerce or internet related) or metaphorical, in which a market functions.
Mechanisms of markets
In economics, a market that works under laissez-faire policies is a free market. It is “free” as government does not interfere through taxes, subsidies, minimum wages, price ceilings, etc. Market prices may be influenced by a seller or sellers with monopoly power, or a buyer with monopsony power. Such influence on price can have an unfavorable effect on market participant’s wellbeing and reduce the effectiveness of market outcomes. Also, the comparative level of organization and negotiating power of buyers and sellers clearly affects the functioning of the market. Markets where price negotiations meet equilibrium, however fails to arrive at desired outcomes for both sides are said as experience market failures.
Markets are organizations and organizations have specific structures. The structure of a smoothly functioning market is defined by the theory of perfect competition. Smoothly functioning markets of the actual world are never perfect, but fundamental structural characteristics can be imagined for real world markets, for example:
1 Multiple small buyers and sellers
2 Buyers and Sellers have same amount of access to market information
3 Products are similar
Study of Markets
The study of actual existing markets comprising of persons acting together in space and place in diverse ways is broadly seen as a solution to nonfigurative and all-encompassing concepts of “the market” and has historical precedent in the works of Fernand Braudel and Karl Polanyi.
The latter term is now commonly used in two ways. First, to indicate the intangible mechanisms whereby supply and demand brazen out against each other and deals are made. In its place, reference to markets reflects normal experience and the places, processes and institutions in which exchanges take place.
Second, the market is frequently used to indicate an integrated, all-encompassing and consistent capitalist world economy. An established trend in economic history and sociology is doubtful of the idea that it is possible to build up a theory to capture a quintessence or unifying thread to markets.
For economic geographers, reference to regional, local, or commodity specific markets can serve up to challenge assumptions of global integration, and draw attention to geographic variations in the structures, institutions, histories, path dependencies, forms of communication and modes of self-understanding of agents in different spheres of market exchange.
Reference to real markets can demonstrate capitalism not as a totalizing power or totally encompassing mode of economic activity, but rather as a set of economic practices scattered over a landscape, rather than a systemic concentration of power.
C. B. Macpherson spots a fundamental model of the market underlying Anglo-American liberal-democratic political economy and philosophy in the seventeenth and eighteenth centuries: Persons are believed as self-interested individuals, who go into contractual relations with other such individuals, in relation to the exchange of goods or personal capacities cast as commodities, with the aim of maximizing financial interest.
The state and its administrative systems are cast as outside of this structure. This model came to dominate economic philosophy in the later nineteenth century, as economists such as Ricardo, Mill, Jevons, Walras and later neo-classical economics moved from reference to geographically located marketplaces to a conceptual “market”. This practice is continued in contemporary neo-liberalism where the market is held up as best place for wealth creation and human freedom, and the states’ role imagined as negligible, reduced to that of maintaining and keeping constant property rights, contract, and money supply. This allowed for boilerplate economic and institutional reorganization under structural change and post-Communist reconstruction.
Similar developments occur in a broad variety of social democratic and Marxist discourses that position political action as hostile to the market. In particular, “commoditization” theorists such as Georg Lukács maintained that market relations essentially lead to excessive abuse of labor and so need to be opposed in totality.
Pierre Bourdieu has recommended the market model is turning into self-realizing, in virtue of its broad acceptance in national and international institutions through the 1990s. The formalist start faces a number of insurmountable difficulties, concerning the generally accepted global scope of the market to cover up the entire planet, in terms of penetrating deep inside of particular economies, and in terms of whether particular claims about the subjects (individuals with financial interest), objects (commodities), and modes of exchange (transactions) apply to any actually existing markets. An essential theme of empirical analyses is the difference and explosion of types of markets since the rise of capitalism and global scale economies. The Regulation school stresses the ways in which developed capitalist countries have employed varying degrees and types of environmental, economic, and social regulation, taxation and public spending, fiscal policy and government provisioning of goods, all of which have altered markets in bumpy and geographical varied ways and formed a variety of mixed economies.
Illustrating on concepts of institutional inconsistency and path dependency, varieties of capitalism theorists (such as Hall and Soskice) recognize two leading modes of economic ordering in the developed capitalist countries, “coordinated market economies” such as Germany and Japan, and an Anglo-American “liberal market economies”. However, such approaches entails that the Anglo-American liberal market economies, in actual fact, function in a matter close to the theoretical notion of “the market”.
While Anglo-American countries have seen rising introduction of neo-liberal forms of economic ordering, this has not resulted to simple convergence, but rather a variety of hybrid institutional orderings.
Rather, an array of new markets has come into sight, such as for carbon trading or rights to pollute. In some instances, such as emerging markets for water, different kinds of privatization of different aspects of formerly state run infrastructure have helped developing hybrid private-public structures and graded degrees of commoditization, commercialization, and privatization.
Challenging for market formalism is the relationship between formal capitalist economic processes and a variety of substitute forms, ranging from semi-feudal and peasant economies widely operative in many developing economies, to informal markets, barter systems, worker cooperatives, or illegal trades that take place in most developed countries.
Practices of integration of non-Western peoples into global markets in the nineteenth and twentieth century did not simply result in the cancelling of former social economic institutions. Rather, various modes of expression arose between changed and hybridized local traditions and social practices and the emergence world economy. So called capitalist markets, in fact, consist of and depend on a wide range of geographically situated money-making practices that do not follow the market model. Economies are consequently hybrids of market and non-market elements.
Supportive is J. K. Gibson-Graham’s complex topology of the diversity of modern market economies describing different types of transactions, labor, and economic agents. Transactions can take place in antiestablishment markets also called as grey or black markets (such as for marijuana) or be artificially sheltered (such as for patents). They can cover up the sale of public goods under privatization schemes to co-operative exchanges and occur under anecdotal degrees of monopoly power and state regulation. Similarly, there are a wide variety of economic agents, which involve in different types of transactions on different terms: One cannot imagine the practices of a religious kindergarten, multinational corporation, state enterprise, or community-based cooperative can be included under the same logic of calculability.
This emphasis on proliferation can also be compared with continuing scholarly attempts to show underlying organized and structural similarities to different markets.
An exceptional entry point for challenging the market model’s applicability concerns exchange transactions and the homo economicus assumption of self-interest maximization. There are now a number of streams of economic sociological analysis of markets centering on the role of the social in transactions, and the ways transactions engage social networks and relations of trust, cooperation and other bonds.
Economic geographers sequentially draw attention to the ways in exchange transactions arising against the environment of institutional, social and geographic processes, including class relations, bumpy development, and historically contingent path dependencies.
A helpful representation is provided by Michel Callon’s concept of framing: Each economic act or transaction happen against, incorporates and also re-performs a geographically and cultural specific complex of social histories, institutional arrangements, rules and connections.
These network relations are concurrently bracketed, so that persons and transactions may be unraveled from thick social bonds. The character of calculability is made obligatory upon agents as they come to work in markets and are “formatted” as calculative agencies.
Market exchanges include a history of struggle and contestation that produced actors inclined to exchange under an emerging theme worthy of further study for the interrelationship, inter-penetrability and variations of concepts of persons, commodities, and modes of exchange under particular market formations.
This is most obvious in recent movement towards post-structuralization theory that draws on Foucault and Actor Network Theory and stress relational aspects of personhood, and reliance and integration into networks and practical systems. Commodity set-up approaches further both deconstructed and show alternatives to the market models concept of commodities. Here, both researchers and market actors are thought to be as reframing commodities in terms of processes and social and ecological relationships. Rather than a simple objectification of things traded, the complex network relationships of exchange in different markets calls on agents to alternatively deconstruct or “get with” the obsession of commodities.
Gibson-Graham thus read a wide variety of alternative markets, for fair trade and organic foods, or those employing Local Exchange Trading Systems as not only contributing to its rise, but also forging new modes of ethical exchange and financial subjectivities.
Size limitations
Market size depends upon the number of buyers and sellers in a specific market in terms of the total exchange of money in the market, in general, annually. When specified in terms of money, market size is often expressed in market value, which is the total value of individual products or services.
Commodity’s market value generally differs at the production level, the wholesale level and the retail level. For instance, the value of the worldwide illicit drug market for the year 2003 was projected to be US$13 billion at the production level, $94 billion at the wholesale level (after accounting for seizures ), and US$322 billion at the retail level.