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

Listed author(s):
  • Dolfsma, W.A.
  • Finch, J.
  • McMaster, R.

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.

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Paper provided by 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 in its series ERIM Report Series Research in Management with number ERS-2004-105-ORG.

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Date of creation: 14 Dec 2004
Handle: RePEc:ems:eureri:1824
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  1. Wilfred Dolfsma, 2004. "Institutional Economics and the Formation of Preferences," Books, Edward Elgar Publishing, number 2961.
  2. 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.
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