There’s No Such Thing As “The Market”

425px-London_Stock_Exchange_LogoDan Roberts, writing earlier this year for the Guardian:

Margaret Thatcher famously outraged the left by asserting there was no such thing as society. Perhaps today would be a good moment for David Cameron to flummox rightwing orthodoxy by declaring there is no such thing as “the market”. This mythical creature has been credited with playing a key role in events of the last few days. The market was unhappy with uncertainty. The market doesn’t like coalition government. The market didn’t want to hang around and wait.

Television news crews were even dispatched down to the City of London to try to doorstep this grumpy beast, standing outside empty office blocks hoping to catch a glimpse.

The reality, as ever, is more complicated. There are markets, but many of them, all with buyers and sellers expressing necessarily contradictory opinions on where things are going.

Some of these markets have indeed shown clear reactions to the political turmoil. The foreign exchange market, for example, has seen the value of sterling rise and fall in inverse relation to Labour’s fortunes: the pound fell against the dollar when it looked possible that Gordon Brown’s departure might allow a deal with the Lib Dems, only to rise again when this receded in favour of a Tory-led coalition.

The market in government debt, or gilts, experienced a similarly bumpy ride. But those speculating this might be the start of a long-feared “strike” by disenchanted investors were somewhat let down: a regular government debt auction at the height of the political confusion was twice oversubscribed.

More importantly, all this drama was captured in a surprisingly narrow trading range. As of this evening, sterling is back where it was yesterday lunchtime, which is roughly where it was on Friday. All the intervening ups and downs have moved cable – the forex term for dollar/sterling rates, not the recanonised Vince – by a total of four cents, taking this vitally important yardstick all the way back to where it stood, er, a year ago.

The most volatile and widely quoted market index, the stock market’s FTSE 100, was perhaps the least useful in assessing what was going on. This list of big British shares is actually stuffed full of foreign companies and multinationals and is consequently much more sensitive to global economic conditions than what happens in Westminster. Just as yesterday’s huge rally was driven by the eurozone rescue, it would be wrong to read much into today’s sell-off other than a few people getting overexcited the day before.

But this is also a good day to puncture the equally specious argument that circulates at times like this suggesting we shouldn’t pay too much attention to what goes on in these confusing corners of finance.

Read more here.

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  • Alturn

    The World Teacher Maitreya on society:Society at present is like a den. You know that there are too many snakes in the jungle, so in your den you are the master and you do not allow others to come in. In society as we know it, the like minded stick together and deny (themselves and others) a wider awareness.On the market:To believe dogmatically in market forces . . . is to believe in forces of destruction which are like a snake without eyes let loose. Market forces divide: some will be happy, others will be unhappy. This creates contradictions and chaos. To believe dogmatically in market forces, for example, is to believe in forces of destruction which are like a snake without eyes let loose. Market forces divide: some will be happy, others will be unhappy. This creates contradictions and chaos.- Share International magazine

  • Alturn

    The World Teacher Maitreya on society:Society at present is like a den. You know that there are too many snakes in the jungle, so in your den you are the master and you do not allow others to come in. In society as we know it, the like minded stick together and deny (themselves and others) a wider awareness.On the market:To believe dogmatically in market forces . . . is to believe in forces of destruction which are like a snake without eyes let loose. Market forces divide: some will be happy, others will be unhappy. This creates contradictions and chaos. To believe dogmatically in market forces, for example, is to believe in forces of destruction which are like a snake without eyes let loose. Market forces divide: some will be happy, others will be unhappy. This creates contradictions and chaos.- Share International magazine

  • Cerebralcaustic

    “the market” is a convenient umbrella term that simply describes what people are willing to pay for a given product, service or commodity at a given time.

    so in a sense, “the market” can be seen as a reification fallacy. Drives me crazy when I hear radio newscasters say things like, “the Dow Jones went down 350 points after the news about Obama getting stiches.” It’s simply impossible to know why each and every ripple happens in economics; there’s not always a simple cause-and-effect.

    but on the other hand, “the market” is a very helpful way to describe the decisions of billions of people and millions of businesses. if “the market” decides, for example, that housing is worth less today than 5 years ago, there’s simply no law or government plan that can force home prices higher. In this sense, it’s very important to pay attention to and respect “the market.”

  • Liam_McGonagle

    If the author means to say that the markets don’t exist in the bullshit “Adam Smith-fantasy” form that’s been shoved down our throats ad nauseam since Reagan and Thatcher, he’s quite right.

    What should have become painfully obvious since Q3 2008 is that in absence of regulation, sheer fucking greed takes over and the banksters print counterfeit money hand-over-fist.

    http://dystopiadiaries.blogspot.com/2010/11/would-henry-i-have-castrated-goldman.html

    Sadly, we’ve also learned that when the banks inevitably fail, governments will come to their rescue at the expense of their own constituents’ futures. And curiously, to date the result hasn’t been wholesale hangings of the traitors who foisted this upon us, or even voting them out of office, but rather a ‘faux-populist’ backlash than actually enables the criminals even further.

    http://thegreatamateurhour.blogspot.com/2010/11/populist-dissatisfaction-with-economy.html

    WFT? Douchebags like Paul Ryan, who pleaded for hundred of billions in TARP bailouts for his bankster sponsors get promoted to House budget chief and principled senators like Feingold who fought against that thing every inch of the way get shown the road?

    Reagan’s bullshit “magic of the markets” is just a cruel conjob to redistribute income, privatize gains and socialize losses. Wise up and rise up, people.

  • Liam_McGonagle

    If the author means to say that the markets don’t exist in the bullshit “Adam Smith-fantasy” form that’s been shoved down our throats ad nauseam since Reagan and Thatcher, he’s quite right.

    What should have become painfully obvious since Q3 2008 is that in absence of regulation, sheer fucking greed takes over and the banksters print counterfeit money hand-over-fist.

    http://dystopiadiaries.blogspot.com/2010/11/would-henry-i-have-castrated-goldman.html

    Sadly, we’ve also learned that when the banks inevitably fail, governments will come to their rescue at the expense of their own constituents’ futures. And curiously, to date the result hasn’t been wholesale hangings of the traitors who foisted this upon us, or even voting them out of office, but rather a ‘faux-populist’ backlash than actually enables the criminals even further.

    http://thegreatamateurhour.blogspot.com/2010/11/populist-dissatisfaction-with-economy.html

    WFT? Douchebags like Paul Ryan, who pleaded for hundred of billions in TARP bailouts for his bankster sponsors get promoted to House budget chief and principled senators like Feingold who fought against that thing every inch of the way get shown the road?

    Reagan’s bullshit “magic of the markets” is just a cruel conjob to redistribute income, privatize gains and socialize losses. Wise up and rise up, people.

  • http://hormeticminds.blogspot.com/ Chaorder Gradient

    I’d be more willing to think the market and society are both well engineered through the time tested institution of the Television, we live in this statistically designed, and grouped demographic where most everyone has their favorite time wasting TV shows. Here we are shoved commercials that we statistically would be more likely to buy into.
    Fortunately “we” only refers to those before the internet generation. Trying to control people’s time and money over the internet is a humongous task. The transition of information control is changing from about 12 hours of prime television times the number of channels to the effective infinitum of information online has made mental control near impossible. The strange effect of this is that there are just so many new different kinds of people out there finding and building their own communities, with their own interests. Hidden behind all the craziness, and attempts to control is some kind of strange peaceful anarchy. It makes the concept of global corporations almost obsolete(aside from the obvious point that they have all the money).

  • http://hormeticminds.blogspot.com/ Chaorder Gradient

    I’d be more willing to think the market and society are both well engineered through the time tested institution of the Television, we live in this statistically designed, and grouped demographic where most everyone has their favorite time wasting TV shows. Here we are shoved commercials that we statistically would be more likely to buy into.
    Fortunately “we” only refers to those before the internet generation. Trying to control people’s time and money over the internet is a humongous task. The transition of information control is changing from about 12 hours of prime television times the number of channels to the effective infinitum of information online has made mental control near impossible. The strange effect of this is that there are just so many new different kinds of people out there finding and building their own communities, with their own interests. Hidden behind all the craziness, and attempts to control is some kind of strange peaceful anarchy. It makes the concept of global corporations almost obsolete(aside from the obvious point that they have all the money).

  • http://hormeticminds.blogspot.com/ Chaorder Gradient

    I’d be more willing to think the market and society are both well engineered through the time tested institution of the Television, we live in this statistically designed, and grouped demographic where most everyone has their favorite time wasting TV shows. Here we are shoved commercials that we statistically would be more likely to buy into.
    Fortunately “we” only refers to those before the internet generation. Trying to control people’s time and money over the internet is a humongous task. The transition of information control is changing from about 12 hours of prime television times the number of channels to the effective infinitum of information online has made mental control near impossible. The strange effect of this is that there are just so many new different kinds of people out there finding and building their own communities, with their own interests. Hidden behind all the craziness, and attempts to control is some kind of strange peaceful anarchy. It makes the concept of global corporations almost obsolete(aside from the obvious point that they have all the money).

  • http://hormeticminds.blogspot.com/ Chaorder Gradient

    I’d be more willing to think the market and society are both well engineered through the time tested institution of the Television, we live in this statistically designed, and grouped demographic where most everyone has their favorite time wasting TV shows. Here we are shoved commercials that we statistically would be more likely to buy into.
    Fortunately “we” only refers to those before the internet generation. Trying to control people’s time and money over the internet is a humongous task. The transition of information control is changing from about 12 hours of prime television times the number of channels to the effective infinitum of information online has made mental control near impossible. The strange effect of this is that there are just so many new different kinds of people out there finding and building their own communities, with their own interests. Hidden behind all the craziness, and attempts to control is some kind of strange peaceful anarchy. It makes the concept of global corporations almost obsolete(aside from the obvious point that they have all the money).

  • http://voxmagi-necessarywords.blogspot.com/ VoxMagi

    I should have taken the blue pill.

  • http://voxmagi-necessarywords.blogspot.com/ VoxMagi

    I should have taken the blue pill.

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