What do we talk about when we talk about the market?

By Daniel A. Darrieux

Free. The game of supply and demand determine the allocation of resources in the market.
The market is one of the concepts most used in public debate and, in my opinion, the least understood. A modest contribution to clarification: Ludwig von Mises, author of the book “Human Action”, argues that:“The market is a process – a set of activities – that is driven by people’s actions

, who cooperate within the framework of the division of labor ”.
How does this cooperation take place? An example: someone who makes cardboard boxes, to make a profit, must collaborate with those who pack fruit, sell empanadas or make glasses, supplying them with the formats that are useful to them.Benefit yourself by providing others with what they need

, constitutes the raison d’être of the market economy. Those who undertake live in their own fleshthe challenge of satisfying consumers to be sustainable

“There is no way to survive in the market if we do not offer something that others need or appreciate,” says economist Carlos Rodríguez Braun in his book “State versus market.”

The market allows the proper use of knowledge dispersed in society, which different individuals possess, depending on their activity. The market, to function properly,it must have a legal framework that guarantees freedom, voluntary agreements and property rights

. This generates the necessary incentives to produce and enables the price system to function, transmitting information to guide the allocation of always scarce resources. As Fredrich von Hayek, Nobel laureate in Economics, points out, the market allows the proper use of knowledge dispersed in society, which different individuals possess, depending on their activity. That individual knowledge increases the likelihood of success

in the decisions that are made.It is impossible for a group of politicians and bureaucrats to capture this great body of knowledge

, analyze them and make rational decisions. For this reason, state interventionism never worked and will never work.

Market. That place where bidders and demanders coexist. Beyond opinions is reality: the Index of Economic Freedom, an investigation carried out on a total of 178 countries, establishes apositive correlation: greater economic freedom – more market – greater prosperity

. Argentina is ranked 148th in the ranking. It is suggested thatwhen the market fails, the state must intervene. Error

“The idea that you have to intervene in the market because it is not perfect – as if something human were – is not only wrong, but the reality is the opposite,” says Rodríguez Braun. The market processgenerates the incentives for learning to occur and possible misalignments to be corrected

Would it be appropriate to take Messi out of a match because he just missed a penalty? Perfect competition theory is taught in most universities, a useless lab scheme that doesn’t explain how the market process works

and the business function. A scheme that supports – also – a justification for state intervention in the face of the supposed “imperfection” of the market.

The ethics of the market economy and the benefits of economic freedom are a productive imperative and a moral beacon to the business function.
What if we begin to raise the flaws and imperfections of the state? (which are many, incidentally).
Reference is also made to “the blind and impersonal forces” of the market. Other error. The market is a system of human relations.

It is the subjective and changing valuations and preferences of buyers and sellers that drive the changes that operate in the market.A free market is founded on a value system, such as individual freedom
. Respect for each one’s life project is another of those values, as highlighted by Professor Alberto Benegas Lynch (h).

Let us remember that Adam Smith, the famous author of “The Wealth of Nations”, first wrote the book “Theory of Moral Sentiments”, in which empathy and benevolence are central.
The ethical aspects of the market economy provide a moral justification for the entrepreneurial function.This worldview must be understood by businessmen and entrepreneurs

, who must raise their voices more, without blushing, to promote the benefits of economic freedom, an ethical and productive imperative.The first step to reverse the decline of our beloved country is to have clear ideas

, to identify the development strategy that allows us to move in the right direction.



The position that Argentina occupies among the 178 countries that make up the ranking of “Economic Freedom”

We would like to thank the writer of this article for this incredible material

What do we talk about when we talk about the market?

Hank Gilbert