Market system

A market system (or market ecosystem^[1]) is any systematic process enabling many market players to offer and demand: helping buyers and sellers interact and make deals. It is not just the price mechanism but the entire system of regulation, qualification, credentials, reputations and clearing that surrounds that mechanism and makes it operate in a social context.^[2] Some authors use the term "market system" to refer to specifically to the free market system.^[3] This article focuses on the more general sense of the term according to which there are a variety of different market systems.

Market systems are different from voting systems. A market system relies on buyers and sellers being constantly involved and unequally enabled; in a voting system, candidates seek the support of voters on a less regular basis. In addition (a) buyers make decisions on their own behalves, whereas voters make decisions for collectives, (b) voters are usually fully aware of their participation in social decision-making, whereas buyers are often unaware of the secondary repercussions of their acts, (c) responsibility for making purchasing decisions is concentrated on the individual buyer, whereas responsibility for making collective decisions is divided, (d) different buying decisions at the same time are made under conditions of scarcity --- the selection of one thing precludes the selection of another, whereas different voting decisions are not --- one can vote for a president and a judge in the same election without one vote precluding the other, and (e) under ordinary conditions, a buyer is choosing to buy an actual good and is therefore never overruled in his choice, whereas it is the nature of voting that the voter is choosing among potential alternatives and may be overruled by other voters.^[4] However, the interactions between market and voting systems are an important aspect of political economy,^[5] and some argue they are hard to differentiate; for example, systems like cumulative voting and runoff voting involve a degree of market-like bargaining and trade-off, rather than simple statements of choice.

^ Ledgerwood, Joanna; Earne, Julie; Nelson, Candace (2013). The New Microfinance Handbook: A Financial Market System Perspective. Washington, DC: World Bank. p. 26. ISBN 978-0-8213-8927-0. Retrieved 2019-07-20.
^ Campbell R. McConnell, Stanley L. Brue (2005). Economics: Principles, Problems, and Policies. McGraw-Hill Professional. ISBN 978-0-07-281935-9.
^ Lindblom, Charles Edward (2002). The Market System: What it Is, How it Works, and What to Make of It. Yale University Press. ISBN 978-0-300-09334-6.
^ Buchanan, James M. (1954). "Individual Choice in Voting and the Market". Journal of Political Economy. 62 (4): 334–343. doi:10.1086/257538. ISSN 0022-3808. JSTOR 1827235. S2CID 153750341.
^ Swanson, Jacinda (2007). "The Economy and Its Relation to Politics: Robert Dahl, Neoclassical Economics, and Democracy". Polity. 39 (2): 208–233. doi:10.1057/palgrave.polity.2300055. ISSN 0032-3497. JSTOR 4500273. S2CID 144669186.

[1] Ledgerwood, Joanna; Earne, Julie; Nelson, Candace (2013). The New Microfinance Handbook: A Financial Market System Perspective. Washington, DC: World Bank. p. 26. ISBN 978-0-8213-8927-0. Retrieved 2019-07-20.

[2] Campbell R. McConnell, Stanley L. Brue (2005). Economics: Principles, Problems, and Policies. McGraw-Hill Professional. ISBN 978-0-07-281935-9.

[3] Lindblom, Charles Edward (2002). The Market System: What it Is, How it Works, and What to Make of It. Yale University Press. ISBN 978-0-300-09334-6.

[4] Buchanan, James M. (1954). "Individual Choice in Voting and the Market". Journal of Political Economy. 62 (4): 334–343. doi:10.1086/257538. ISSN 0022-3808. JSTOR 1827235. S2CID 153750341.

[5] Swanson, Jacinda (2007). "The Economy and Its Relation to Politics: Robert Dahl, Neoclassical Economics, and Democracy". Polity. 39 (2): 208–233. doi:10.1057/palgrave.polity.2300055. ISSN 0032-3497. JSTOR 4500273. S2CID 144669186.

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