A market is a physical or virtual place where sellers sell and buyers buy goods, services, financial products, or information. In markets, buyers seek products or services, sellers offer them at a price, while the price is influenced by the relationship between supply and demand. In terms of spatial placement of the market, they can be divided into: physical markets (physical places where people directly buy goods) and virtual markets (Online selling platforms). By the type of items that are sold markets are divided into: product market (goods and services), financial markets (stock and bond markets), labor markets (workers and employers seek each other), commodity markets (raw materials like oil, gold, or crops), currency markets, money market (lending and borrowing of money), futures markets, insurance markets, and debt markets. Apart from legal markets, there are also illegal or black markets; they either sell illegal items such as drugs or endangered animals, or sell otherwise legal items, but don’t follow official regulations for the market of such items.  

Market from the Perspective of the Proponents of the Free Market

English economist Adam Smith was among the first authors to put forth a theoretical and ideological analysis of capitalism in his book An Inquiry into the Nature and Causes of the Wealth of Nations (1776). Smith believed that people naturally tend to seek self-interest and improve their material conditions. He also believed that people have a natural tendency to buy and sell goods. For him, the best economic system is the one that promotes selfishness, entrepreneurship, competition, a laissez-faire market, and international free trade. Smith was decidedly against practices like mercantilism, guild restraints on participation and apprenticeship rules, protectionism, and monopolies. He argued that monopolies bring several negative consequences – higher prices, bad management, pressure on the government to protect their monopolistic interests, and misallocation of resources. Smith showed how crucial the division of labor in an economy is, as it improves workers’ skills and promotes inventiveness and output. Smith believed that the role of government should be limited. Smith argued in his theory of price that the prices of goods are a direct consequence of the costs of paying for the land, labor, and capital involved in producing certain goods. Smith called the price that comes from the cost of production a natural price. He argued that the market price tends to equal the natural price.

Alfred Marshall is perhaps best known for his formulation of the theory of supply and demand, which he presented in his seminal work, Principles of Economics (1890). Marshall explained how the interaction of supply and demand determines market equilibrium and prices. He introduced the concept of the demand curve, representing the quantity of a good or service that consumers are willing to buy at various price levels, and the supply curve, representing the quantity that producers are willing to offer at different prices. The point of intersection between these curves is the market equilibrium, where the quantity demanded equals the quantity supplied, establishing the market price. Marshal introduced the concept of “elasticity,” which relates to the responsiveness in supply and demand of a commodity due to price changes. Unitary elasticity happens when that responsiveness is proportionately equal to the price change. In cases when responsiveness falls above the price change market exhibits inelasticity, and if responsiveness is greater than price changes, then that state is elastic. Another significant contribution by Marshall was the introduction of the concept of consumer surplus. He demonstrated that consumers often receive more satisfaction, or utility, from a good than what they pay for it. Consumer surplus measures the difference between the price a consumer is willing to pay for a good and the actual price they pay in the market. This concept provided a new way of understanding consumer behavior and welfare, laying the groundwork for welfare economics. In addition to consumer surplus, Marshall also explored the idea of producer surplus. This concept represents the difference between the price at which producers are willing to sell a product and the price they actually receive in the market. Producer surplus is a measure of the benefits producers gain from selling goods at a price higher than their production costs. Together with consumer surplus, producer surplus contributes to what is known as total welfare or social surplus in a market.

Friedrich Hayek left an indelible mark on the discourse surrounding individualism, free-market economics, and the role of government in society. One of Hayek's most influential critiques was aimed at the concept of central planning, which he vehemently opposed. In his seminal work The Road to Serfdom (1944), he argued that attempts at comprehensive government planning inevitably lead to a loss of individual liberties and a descent into totalitarianism. Hayek's insights were particularly relevant in the context of the mid-20th century, when many countries were experimenting with various forms of state-controlled economies. He cautioned against the concentration of power in the hands of a few planners who, despite their intentions, could not possibly possess the knowledge required to make efficient and effective decisions for an entire economy. Hayek was concerned with the “knowledge problem” – what are the limitations of our knowledge and how those limitations influence our theoretical and pragmatic efforts. The “central question of all social sciences” is how dispersed and imperfect knowledge of individuals can be coordinated and conduce cooperation. Hayek's answer to that question is found in his belief in spontaneous order. He argued that complex systems, such as economies and societies, emerge naturally from the interactions of individuals pursuing their own interests. This concept stood in contrast to the notion that central planners could design and control every facet of society to achieve optimal outcomes. Hayek believed that the market is a form of communication system that uses unregulated and competitive prices as a signal to all market participants. A market that is guided by decentralized decision-making and price signals is a prime example of spontaneous order. According to him, prices transmit information about supply and demand that is dispersed throughout society, allowing individuals to make informed choices without requiring a central authority. Hayek's advocacy for individualism and personal freedom was closely tied to his economic views. He believed that a free market economy not only promoted efficient resource allocation but also safeguarded individual liberties.

Milton Friedman's advocacy for economic freedom was another cornerstone of his philosophy. He contended that free markets were essential for fostering innovation, efficiency, and individual liberty. In his influential work Capitalism and Freedom (1962b), he argued against government interventions that he believed hindered market mechanisms. He believed that competitive markets, coupled with minimal government interference, could lead to optimal outcomes for society as a whole.

John Stuart Mill, in his Principles of Political Economy (1848), analyzed international trade and concluded that the countries with lower demand and greater elasticity of demand would benefit the most from this trade. When demand is elastic, changes in prices of imported goods inversely influence the volume of imports – the higher the prices, the lesser the demand, and the other way around. Mill was the first economist that introduce this relationship between the prices of goods and demand for them.

                  Market and the Need for State Intervention

John Maynard Keynes’s book The General Theory of Employment, Interest and Money (1936), introduced a new branch of economics -  macroeconomics. The book subverted the classical economics assumption that a competitive market economy is self-equilibrating, and that it always produces full employment. Keynes introduced the concept of  ‘underemployment equilibrium’ that required monetary manipulation by the central bank and extensive ‘socialization’ of investment to maintain full employment. Keynes argued that government intervention was necessary in times of economic crisis to stimulate demand and prevent economic collapse. He believed that in a recession, individuals and businesses would cut back on spending, leading to a decrease in demand and a further decrease in economic activity. To combat this, Keynes advocated for government spending on public works, social programs, and other initiatives to boost demand and stimulate the economy.

In the book The Great Transformation (1944), Karl Polanyi criticized the self-regulating economy of the free market because he considered it to be economically unsustainable and that it would destroy the social order. The market economy promotes extreme individualism that destroys social cohesion, which is necessary for normal social cooperation. Polanyi developed a substantivism, a theory of economics in which the economy is viewed as in the state "embeddedness", that is, the view that the economy is interconnected and constrained by wider social relations. In pre-industrial societies, the economy was organized through socially regulated relations of reciprocity and redistribution. He believes that two parallel processes are taking place in modern capitalism, on the one hand, market logic is spreading to all areas of social life, while, on the other hand, social protection mechanisms are being developed to protect society from the most harmful consequences of the self-regulatory market system. Free-market capitalism seeks to destroy relations of reciprocity and redistribution, but social protection mechanisms, such as those that emerged in England in the early 19th century, act as a resistance to that intention. Although Polanyi was inspired by Marxist theory and ideology, he believed that social protection measures would prevent the whole society from being divided into two clearly separated and opposing classes, as Marxist theory assumed.

                               Marxist Critique of the Market

Karl Marx posits that one of the key consequences of the capitalist relations of production and the ideology that defends them is what Marx calls "alienation." Alienation occurs when workers in capitalism begin to view the things they produce as foreign objects. They see goods as something foreign to them, and that has the power to control people. „Productive labor“ is the primary and most important human activity, in which people truly express their own being. When people give up the products of their labor to place them on the market as goods, they then lose a part of themselves. Workers are alienated not only from the things they produce but also from the whole system - economic flows and impersonal market forces of supply and demand, as well as from the ruling ideology and institutions that support capitalist domination. Eventually, workers become alienated from themselves.

David Harvey, in his book Social Justice and the City (1973), applies the principles of radical geography and Marxist political economy to explore cities and urbanism. Harvey believes that the urban-rural dichotomy is not identical to the division into modern and traditional. The same cities and life in them have differed throughout history, and in addition, different types of cities have existed within the same mode of production, just as there have been similar types of cities within different modes of production. He believes that, therefore, when studying cities, it is better to use the term "mode of economic integration" instead of the term mode of production. The concept of mode of economic integration refers to how reciprocity, redistribution, and the market are interconnected within an economic system. When studying the modes of economic integration, the most important aspect is the surplus value that arises within the economy. Cities were created through the extraction, mobilization, and geographical concentration of surplus value. Companies always influence the creation and functioning of markets, which are based on the relative rarity of goods and services. Exploitation and appropriation are inherent in the market, so government intervention is necessary to mitigate these destructive market tendencies.

Harvey's most famous and influential book is The Condition of Postmodernity (1989). In this book, he explores the consequences of the development of postfordism and new information technologies on the economy and culture. Postfordism has led to the flexibility of work, which is characterized by lower employment permanence, an increase in temporary and part-time jobs, a reduction in labor rights and benefits, and a reduction in the chances of obtaining a pension and health insurance. Labor flexibility is associated with flexible accumulation - high structural unemployment, a large service sector, halting wage growth, and declining size and union influence. Flexible accumulation has led to what Harvey calls "space-time compression". This phrase signifies the change made possible by new communication and information technologies. Post-Fordist labor relations and new technologies have enabled capital to make and implement investment and business decisions around the planet in a very short time. Capital can now produce specific products, coordinate diversified investments, reduce production and delivery times, and employ workers in flexible positions in the short term and globally. The computerization of financial markets and businesses, and the increased flow of information, money, goods, and people at the transnational level, are creating a global market for money, goods, and labor. In addition, industrial plants are moving to underdeveloped countries where all factors of production - land, raw materials, taxes, and labor - are more favorable for making more profit. Former farmers from underdeveloped countries are becoming industrial workers and consumers of capitalist goods.

In his book Civilization and Capitalism, 3 vol. (1992, in French 1967-1979), Fernand Braudel analyzes the relationship between capitalism and the market. In this book, he presents three levels of social life. On the first level, everyday life of individuals happens, on the second level are the markets that are always present, and on the third level is capitalism, which, in his opinion, is not inevitable. For Braudel, capitalism functions as an anti-market because it monopolizes economic life in order to maximize profits and distort the market to suit capitalism. In this way, capitalism dominates and threatens the market and everyday life. Capitalist aspirations to control the market and market resistance to such tendencies have shaped the history of the new century. 

In the book The Accumulation of Capital: A Contribution to the Economic Explanation of Imperialism (1913), Rosa Luxemburg presents her theory of the causes and the rise of imperialism. The rise of modern capitalism in the West was intrinsically tied to and spearheaded by imperialistic subjection and exploitation of Asia, Africa, and Latin America. Western imperialism destroyed those communal economic systems and caused immense social and economic devastation, hunger, and deaths. She argued that the inherent tendencies of capitalism for limitless production and capital accumulation and the need for new markets inevitably lead to imperialism. Luxembourg was extremely critical of war and militarism and saw them as outgrowths of capitalism and imperialism.

                         Markets in a Globalized World

Roland Robertson, in Globalization: Social Theory and Global Culture (1992), developed a specific sociological approach to globalization. Robertson does not believe that globalization occurred after the cessation of modernization, but that globalization is only a continuation of the process of modernization at the global level. To better explain the relationship between the spread of modernization throughout the world and local cultural specifics, Robertson introduced the notion of "glocalization" into sociology. This term refers to a situation in which the expansion of global culture is taking place, but, at the same time, local traditions are being preserved, as well as a concurrent and related process of specific transformation of global trends, in order to more easily fit into local culture. One of the examples of glocalization is the spread of nationalism as an ideology, which originated with modernization in the West and spread across the planet, but which is operationalized and contextualized in different ways in each local culture. Another example is the global market for goods and services and the spread of consumer culture. Although the market for goods and services is becoming more and more global, and consumer culture (consumerism) is spreading to all parts of the world, the global market is adapting to specific local markets. The production and marketing of many goods and services, sold globally, are adapted to local tastes and consumer habits. 

Saskia Sassen introduced the notion of the global city into sociology in her book The Global City: New York, London, Tokyo (1991). Global cities are the focal points of the organization of the global economy; they are centers of financial firms and firms specializing in special services; they are innovation production centers in the most profitable industries, and they are large markets for products and innovation. These cities are globally integrated, with each other. They have undergone major changes in the structure of economic branches, spatial organization, and social structure. Global cities differ from earlier cities in that the modern economy has a greater need for centralized control and management. These cities are centers of financial and banking innovation and services, marketing, accounting, and legal services, and the largest users of these services are transnational companies. These economic sectors represent the largest source of income and economic power of global cities.

In the book Counterfire: Against the Tyranny of the Market  (1998b), Pierre Bourdieu shows that globalization entails, at the same time, the expansion of international financial capital, but also has a normative function, because it spreads the ideology of global capitalism as an inevitable reality that all states, organizations, and actors have to adapt to. This ideology is a carefully crafted myth that serves to dismantle the welfare state in Western Europe.

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