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Market and Society: How do they relate, and contribute to welfare?

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  • Dolfsma, W.A.
  • Finch, J.
  • McMaster, R.

Abstract

This paper discusses how markets and society relate to each other. We present and discuss three views: markets as separate, markets as embedded, and markets as impure. One’s stance on the contribution of markets to welfare hinges on the conceptualization of market and other spheres in society. If, for instance, one perceives of the economy (the economic domain) as an all-encompassing sphere or as a sphere totally separate from others, then one would believe markets necessarily contribute to welfare. Markets are presumed to be ubiquitous in mainstream economics; the orthodox view is that of the ‘market as separate’. Indeed, Frank Hahn notably conceded that neoclassical economics does not describe markets, but ‘conjures’ them up. Mainstream conceptions of the market are functionalist – in the appropriate conditions the market is an efficiency conduit, and hence wealth and welfare generating. Creating these appropriate conditions then drives policy, such as the provision of health care, and tends to produce a one size fits all approach. This paper argues that this is an overly restrictive conceptualization of markets, and is an inadequate basis for conceptualizing the potential effects of markets. Conceptualizing the market as impure and embedded must be added. We contribute to this discussion by developing the concepts of ‘boundaries’ separating spheres. Such an approach broadens the notion of welfare and well-being beyond the monetized parameters of economic orthodoxy.

Suggested Citation

  • Dolfsma, W.A. & Finch, J. & McMaster, R., 2004. "Market and Society: How do they relate, and contribute to welfare?," ERIM Report Series Research in Management ERS-2004-105-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
  • Handle: RePEc:ems:eureri:1824
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    File URL: https://repub.eur.nl/pub/1824/ERS%202004%20105%20ORG.pdf
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    References listed on IDEAS

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    1. Eckehard Rosenbaum, 2000. "What is a Market? On the Methodology of a Contested Concept," Review of Social Economy, Taylor & Francis Journals, vol. 58(4), pages 455-482.
    2. Wilfred Dolfsma, 2004. "Institutional Economics and the Formation of Preferences," Books, Edward Elgar Publishing, number 2961.
    3. Light, Donald W., 2001. "Managed competition, governmentality and institutional response in the United Kingdom," Social Science & Medicine, Elsevier, vol. 52(8), pages 1167-1181, April.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Wilfred Dolfsma & Rene Eijk & Albert Jolink, 2009. "On a Source of Social Capital: Gift Exchange," Journal of Business Ethics, Springer, vol. 89(3), pages 315-329, October.
    2. Mann, Stefan, 2013. "“Work”? On utility in the market and in the unpaid sphere," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 45(C), pages 86-91.
    3. David George, 2006. "Social class and social identity," Review of Social Economy, Taylor & Francis Journals, vol. 64(4), pages 429-445.
    4. Rick Wicks, 2009. "A model of dynamic balance among the three spheres of society – markets, governments, and communities: Applied to understanding the relative importance of social capital and social goods," International Journal of Social Economics, Emerald Group Publishing, vol. 36(5), pages 535-565, April.
    5. Dolfsma, W.A. & McMaster, R. & Finch, J., 2005. "Institutions, Institutional Change, Language, and Searle," ERIM Report Series Research in Management ERS-2005-067-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.

    More about this item

    Keywords

    health care; market; market as separate; markets as embedded; markets as impure; society;

    JEL classification:

    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • A14 - General Economics and Teaching - - General Economics - - - Sociology of Economics
    • M - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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