David Graeber and the meaning of markets

Although scholars and politicians like to define our economic system as a “market economy” (most of the time to avoid the term “capitalism”), they still lack a good definition and representation of markets. What is a market? Institutionalist economists are well aware that the Marshallian neo-classical representation of markets founded on demand and supply curves is nothing but an abstract representation that has nothing to do with reality. The role and the nature of competition are often used as a way to discuss the market (Mc Nulty 1968), its perfection or its effects. But as Mauss (1924), Kirman and Vignes (1991), and many others demonstrated, economic behaviors in markets cannot be isolated from their social contexts. Is it to say that markets are not real autonomous institutions, but only abstract and theoretical representations? Obviously not: markets exist and affect the social and economic reality, but it is necessary to define its specific characteristics compared to other forms of economic exchanges. This paper is an attempt to do so by developing some insights supported by Graeber (2011). In his book, David Graeber shows that markets were historically created by public expenditures, the implementation of a tax system and the generalization of money as means of payment. For Graeber, this historical fact implies that “state regulation” and “free markets” should not be seen as opposite but as “the two sides of the same coin”. He also discusses the different anthropological aspects of human economic interactions that appear to be dominant in non-market economies. The goal of this paper is therefore to discuss theses insights and to show how they could be used to characterize some specific attributes of markets, which is a necessary first step to engage a real definition of “markets”