{"id":90120,"date":"2026-02-21T07:55:50","date_gmt":"2026-02-21T07:55:50","guid":{"rendered":"https:\/\/www.taxresearch.org.uk\/Blog\/?p=90120"},"modified":"2026-02-21T07:55:50","modified_gmt":"2026-02-21T07:55:50","slug":"new-glossary-entry-markets","status":"publish","type":"post","link":"https:\/\/www.taxresearch.org.uk\/Blog\/2026\/02\/21\/new-glossary-entry-markets\/","title":{"rendered":"New glossary entry: markets"},"content":{"rendered":"<p class=\"p3\"><span style=\"color: #000000;\"><span class=\"s1\"><b>Markets<\/b><\/span> are systems in which goods, services, labour, and financial assets are exchanged under rules that determine prices and terms of trade. They are not natural phenomena. They are created and governed by law, regulation, custom, and power.<\/span><\/p>\n<p class=\"p3\"><span style=\"color: #000000;\">First, markets are institutions:<\/span><\/p>\n<ul>\n<li class=\"p3\"><span style=\"color: #000000;\">Property rights define what can be sold.<\/span><\/li>\n<li class=\"p3\"><span style=\"color: #000000;\">Company law defines who can trade.<\/span><\/li>\n<li class=\"p3\"><span style=\"color: #000000;\">Contract law enforces agreements.<\/span><\/li>\n<li class=\"p3\"><span style=\"color: #000000;\">Competition law sets limits on monopoly.<\/span><\/li>\n<li class=\"p3\"><span style=\"color: #000000;\">Accounting rules define profit.<\/span><\/li>\n<li class=\"p3\"><span style=\"color: #000000;\">Tax law shapes incentives.<\/span><\/li>\n<\/ul>\n<p><span style=\"color: #000000;\">Without these structures, there are no markets at all. The idea of a \u201cfree market\u201d independent of the state is a myth.<\/span><\/p>\n<p class=\"p3\"><span style=\"color: #000000;\">Second, markets allocate, but they do not decide fairness. Prices reflect bargaining power as much as productivity. A worker without a union, a tenant facing a landlord monopoly, or a small supplier dealing with a dominant retailer will receive terms shaped by power, not abstract efficiency. Distribution is therefore political, not automatic.<\/span><\/p>\n<p class=\"p3\"><span style=\"color: #000000;\">Third, markets often fail. Externalities such as pollution, public goods such as infrastructure, information asymmetry in finance, and monopoly power in technology all distort outcomes. Left alone, markets can produce inequality, instability, and environmental harm. Regulation is not interference with markets; it is what makes them workable.<\/span><\/p>\n<p class=\"p3\"><span style=\"color: #000000;\">Fourth, markets interact with the wider macroeconomy. Demand depends on income, which depends on public spending, private investment, and the existence of social security to support those in need who could not otherwise spend. When governments pursue austerity or an obsession with balanced budgets, markets shrink because customers disappear. Microeconomic exchange cannot thrive without macroeconomic stability.<\/span><\/p>\n<p class=\"p3\"><span style=\"color: #000000;\">Fifth, markets must serve a purpose. An economy exists to provide care, security, and sustainability. Markets are tools to help organise production and exchange, but they cannot replace democratic decision-making about health care, education, housing, environmental protection, or social security. When finance dominates markets, they cease to serve society.<\/span><\/p>\n<p class=\"p3\"><span style=\"color: #000000;\">Finally, markets are shaped by values. Choices about tax policy, labour law, environmental standards, and corporate governance determine whether markets reward innovation and contribution or rent extraction and pleonexia. As I often argue on Funding the Future, reclaiming markets for the public good requires transparency, fair taxation, and democratic oversight.<\/span><\/p>\n<p class=\"p3\"><span style=\"color: #000000;\">Markets are therefore neither saints nor villains. They are mechanisms designed by society to serve society. If we design them well, they help allocate resources efficiently and fairly. If we abandon them to power and myth, they become instruments of inequality and instability.<\/span><\/p>\n<hr \/>\n<p>See also free markets.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Markets are systems in which goods, services, labour, and financial assets are exchanged under rules that determine prices and terms of trade. They are not<br \/><a class=\"moretag\" href=\"https:\/\/www.taxresearch.org.uk\/Blog\/2026\/02\/21\/new-glossary-entry-markets\/\"><em> Read the full article&#8230;<\/em><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[35,206],"tags":[],"class_list":["post-90120","post","type-post","status-publish","format-standard","hentry","category-economics","category-glossary"],"_links":{"self":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/90120","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/comments?post=90120"}],"version-history":[{"count":2,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/90120\/revisions"}],"predecessor-version":[{"id":90122,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/90120\/revisions\/90122"}],"wp:attachment":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/media?parent=90120"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/categories?post=90120"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/tags?post=90120"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}