This morning, as part of an independent study, a cohort-mate and I discussed Talcott Parson’s The Structure of Social Action. The book is a bit surreal – the entire thing is almost a shaggy dog story in the Sociology of Knowledge, wherein the theorists he reviews (Marshall, Pareto, Durkheim and Weber) are proven to be correct simply because they said vaguely similar things at the same time in different places. Let’s just say the strengths of the book, and its enduring legacy, are neither in its style nor the logical strength of its main conclusions. I don’t mean to be too harsh – there was a lot of interest in the sections we read, especially on the development of liberal political thought and Sociology’s emergence as a reaction against it.
But none of that has much to do with the thrust of this post – the free market. Somewhere in his exposition of liberal theory from Hobbes to Marshall (my copy is elsewhere at the moment [EDIT: Page 104, about Malthus’ idea that competition served as a social regulation mechanism, Parsons doesn’t actually use the phrase free market]), Parsons notes that the importance of the free market for liberal* theory has a lot to do with the way it prevents anyone from exercising power over anyone else, and less to do with the way it maximizes productivity. Parsons is not the only one to make this argument – it shows up also in a lot of the work in the “corporate governance” tradition in the mid-20th century, authors like JK Galbraith and Carl Kaysen argue that the rise of large corporations is potentially dangerous because such corporations have discretion in a way impossible under a competitive market.
More generally, I think in sociology we can sometimes forget that the Free Market has been praised, defended and fought over not simply because of its virtues in allocating resources. Rather, I can think of four analytically distinct arguments in favor of relatively unfettered markets as the best way to organize economic life**:
Ok, so there you have it. Four arguments in favor of the Free Market (along with some bits of some counter-arguments). Enjoy! And leave a comment if you think I’m missing any, or grossly mis-characterizing the ones I have.
* In this post, I use liberal in the older, non-American sense, relating to the “liberalism” of thinkers like Locke, and the “market liberalism” of free market proponents throughout the ages. Parsons actually does a nice job of parsing these arguments (especially the early emphasis on individualism as a normative claim about how things should be rather than a positive claim about how things are), but for my purposes there’s no real need to disaggregate, as the arguments I’m getting to are all in the 20th century.
** Note, I’m not arguing for any of these in particular, I just want to put them out there and associate them with a few names to see what y’all think.