The concept of “exchange” is at the core of the concept of markets. Markets are systems of exchange in which people with money or commodities to voluntarily trade these for other items which they prefer to have.
Since property is itself a social institution, society will have a stake in ensuring that the terms of exchange are fair and that limits of exchange and property are set, so that some things, such as the labour of children should not be traded at market prices. Extreme political and economic liberty denies that anything other than the free operation of markets themselves is needed to solve this and practically all other political problems. Extreme communism takes the diametrically opposing line that the social evils of exploitation and injustices can only be solved by eliminating private property itself. A vague, but nonetheless helpful distinction is drawn between “market economics” and “market societies”. The latter are societies where “instead of the economy being embedded in social relations, social relations are embedded in the economy”. Many arguments about the value of markets have to do with their impact on the character of a society as a whole and with the questions of where, when and how one should limit the influence of markets.
Defenders of the market point out that, where markets are working properly, self-interested behavior on the part of each individual may contribute to the welfare of everyone. Thus there is no conflict between producing or exchanging with a view to one’s own advantage and contributing to welfare of others.
What seems certain is that a world in which people interested with one another solely through market transactions would be not only morally barren, but probably unsustainable. The question that arises is how to prevent the market from encroaching upon spheres of life that presently act as a counterbalance to it. We should investigate that reason why certain goods and certain human relationships needs to be kept insulated from market mechanisms: for instance, why marriage should not be turned purely into a negotiated contract between husband and wife. The reasons are quite varied, but one concerns the way exposure to market mechanisms may change the character of relationships for the worse. For instance, undermining trust: if I know that doctors stand to profit from the treatment they prescribed, will I have the same confidence in them as when they have no financial stake in the income?
A careful examination of market practices is likely to lead neither to an unqualified endorsement nor an unqualified rejection of market mechanisms. Instead it will encourage us to question the institution framework of market. How can we ensure that it remains competitive and therefore efficient? Can we guarantee that each participant has access to sufficient resources that they will not be exploitative? How do we prevent markets from encroaching into spheres of human life where they have no place?