1. Throughout the first chapter of his book, Reinventing the Bazaar, John McMillan lists and describes several characteristics that define a market. As McMillan states in his first chapter, “[A typical market] evolves spontaneously, driven by its participants. It can operate with little or no formal structure — but only up to a point. To reach a degree of sophistication, its procedures need to be clarified and an authority given the power to enforce them.” A key aspect and requirement of a successful market comes with the power of the market participants, as human interaction is the fundamental basis for markets. Communication and the flow of information between market participants is important, as well as a significant amount of freedom for both buyers and sellers. Without the freedom of choice, markets would not flow smoothly. Those participating in the market system must be able to freely choose their items of both sale and purchase. Additionally, there must be an understanding of trust within the market. Oftentimes, the enforcement of market rules is necessary, and governments are usually responsible for providing the enforcement. McMillan also states that an element of competitive marketing must be present in the most successful markets.
2. The history of markets is riddled with all kinds of stories — from successes to failures, everyone has had some sort of market-related experience. There are many types of markets, some more honest and respectable than others. It’s evident that many people do in fact distrust the market system, and as McMillan states, “some people revile them as the source of exploitation and poverty.” These opinions likely stem from the fact that not all markets have successfully achieved mutual benefits for both buyers and sellers. In other situations, government authority has caused markets to experience inequality and dishonesty, especially in situations involving impoverished societies. Personally, I feel that markets usually promote ‘liberty and prosperity’, however, there have been many situations that suggest just the opposite.
3. In modern markets, there are many important rules, some more important than others. In my opinion, the most important rules are those promoting market structure, rather than authoritative market control. Rules that provide market structures lead participants towards adaptation and in turn will evolve their individual markets to achieve more efficient trading systems. Additionally, the enforcement of mutual trust within the marketplace is also important.
