the logic of "the market" to it is problematical.
In all of these areas, the conventional assumptions associated with markets are incomplete and may therefore be misleading. This does not necessarily always mean that markets play a smaller role than commonly supposed. In the case of the American economy, for example, Robert Reich has suggested that those Americans who work as what he calls "symbolic analysts" operate in a freer market than we might immediately suppose. At the same time, however, the nature of that market may put greater emphasis upon personal relationships of a sort not readily integrated into conventional market analysis.
The structure of this essay is as follows. First we will consider the market as a theoretical construct, or more precisely as a myth, metaphor, or story of how economic life works. We will then say something about how the idea of markets developed. Having established something of the nature of "the market" as conventionally understood, we will be able to ask where the limits of that conventional understanding may lie. What sorts of conscious decisions may economic players make that do not accord with the theory of the market? Much more important, what part is played by "irrational" behavior--such as prejudice--in causing the real world to behave otherwise than "the market" would dictate?
To amplify this point, we will look at two specific economies, that of Japan and of the United States, and their behavior. It should be emphasized that the comparison is not intended to be a direct one; we are not seeking to say that "Japan does A, while the United States does B." We will in fact be looking at these two economies in quite different ways. Both case studies, however, are intended to illuminate features of the complex relationship between real societies and the pristine conception of the market. We will conclude with some general remarks about "the market," and its strengths and li...