Panel 6: Real Markets and Market Ideology

Can we have another image please? Ah, a market. A street vendor…





Lets think about markets. Markets arise out of needs and they service needs. The are very, very useful mechanisms. So lets think about how they now interact with the ideology of markets. The Market Society is an ideological abstraction of ‘real markets’ – that is places where actual commodities are bought and sold. The street vendors of New Delhi and Palika Bazar, below your feet, are real markets. In a real market, people trade goods with each other. Such institutions are thousands of years old. They have existed in many different cultures and epochs. Local practices, laws and customs have always overseen the operation of real markets. While there are some common features to markets, the people who operate within them, and the places where markets are located, and how they are operated, varies greatly. For example, the local rules by which a street vendor operates are very different from those of a shop in Palika Bazaar. The laws may be formal or informal. In every part of the world some markets operate legally and others illegally. However a real market operates, it is always a part of society, a part of the culture, in which it operates. The idea that society and culture cause ‘distortions’ to ‘The Market’ is a curiously European and American notion. Until the 19th century, the idea that markets were the principle means of organising human societies did not exist. The concept of a Market Society in which markets are the only means of organising society was unthinkable.

There is a huge different between real markets and the ideology developed from them. Real markets are embedded in social and cultural practices. But notions of society and culture have no place in the ideology of the Market Society.

Lets have another image. OK, I see.

The internet tells me that Palika Bazaar was set up in the 1970s. It contains 370 shops, where you can buy many different commodities at very low cost. The entry on wikipedia also says that there maybe some “fake designer products and pirated CDs, software and movies” in the Bazaar. Real markets organized the distribution of goods that that people want. Just as such actual markets operate in ways that are unrecognizable to the rational logic of economic theory, they may not always operate within the law. A long, twisting story leads from the English Enclosures of the 15th century to those ‘fakes’ and ‘pirated’ goods below your feet in the Bazaar.

We have talked about the ‘tragedy of the commons’ and the way that idea has structured attitudes towards economic globalization – particularly the ideas that wealth countries have broadening and strengthening their IP systems. That has meant enclosing more and more knowledge, bringing it into the property system.

Imagine you buy a CD in Palika Bazaar, and that your friend buys the same CD from a different shop. The CDs look and sound exactly the same. They contain the same songs, and cost the same price. Imagine that as you sit in this park comparing them, a policeman comes along and arrests your friend for possessing illegal goods! What on earth has happened? The answer is that you have bought a legitimate CD. The company that made it was legally authorized to do so by the person who owns the copyright on the songs. The shop owner sold you a legal product. Your friend bought a CD that, though identical was made without paying the person who owns the copyright. The shop owner bought a fake. He may not have known. Your friend bought the illegal copy, and now they are in trouble. The policeman confiscates your friends CD, and they cry.

It happens. Because of the idea of knowledge economics many countries, and many companies, have become obsessed with protecting IP. Enclosure is a vital economic strategy for many corporations and states. But enclosures are never perfect. It is very easy to copy knowledge. In fact, one of the most obvious things about knowledge is how easily it spreads from person to person. In the English Enclosures we talked about fences that were physically erected over common land. And we have talked about the economic concepts derived from this process. In particular, the notion of ‘public goods’. Let’s remind ourselves of that. The concept of Enclosure or privatization was developed greatly in the 20th and 21st century. But so too was the concept ‘tragedy of the commons’.

In the 1940s, Paul Samuelson articulated the concept of ‘public goods’. Such goods were very similar to the common land that was destroyed by the Enclosures. Like common land, public goods suffered from a tragedy. They were very useful to many people, but because they were, individuals had no personal ‘incentive’ to invest in them in order to ensure they survived or to create them in the first place. Public goods, he concluded, need to be upheld, managed and invested in, by the state acting on behalf of the population.





In the last thirty years some economists started to argue that knowledge was a kind of public good. It was difficult to exclude other people from knowledge. Once an idea is common knowledge, it is very hard for an individual to say that they ‘own’ it. Secondly, common knowledge is rather different from common land. If I use a piece of knowledge, it doesn’t prevent you from also using that knowledge. For example, a farmer knows what seeds to sow and when to sow them. That does not exclude another farmer from knowing and doing the same thing. The two farmers are not rivals to each other as they would be if they were trying to both sow seeds on the same piece of land. Even if one farmer tried to exclude the other from his knowledge about seeds, it would be difficult. Thus, it is said that such public goods are both ‘non-rival’ and ‘non-excludable’.

So, back to your CD. The fact that you have a piece of music on a CD doesn’t stop your friend having the same piece on another CD. You are not rivals. Equally, the fact you both bought identical CDs indicates that the knowledge contained in them spreads very easily - it is difficult to exclude other people from it. So, if that is the case, how did we arrive at the idea that one CD is legal and the other illegal? How could a fence be erected around the knowledge, or the music, to enclose it, to make it into property – to make one copy of a CD legal and the other illegal?

The answer is that that fence is erected by intellectual property. IP is an invisible fence that runs around and through many, many things that we buy or sell. It sits around machines, and it gets inside them, wrapping itself around the smallest components. It finds its way in onto CDs, into CDs, T-shirts, computers, medicines, and farmers seeds and many more things. Lets stay with the idea of knowledge for a moment.

When we talked about the ‘tragedy of the commons’, we said the original concept was based on the idea that if many people have access to a piece of common land, the land will be overgrazed. All the edible plants will be taken. The firewood will be burned, and eventually the soil will be washed away. The version of the ‘tragedy’ popularised by ecologist Garrett Harding was of over exploitation leading to environmental ruin. However, as we said in this panel, there are major differences between land and knowledge. In the age of the internet, the concept of the ‘tragedy of the commons’ has become very popular. But, critically, the order of the tragedy has been reversed.

Advocates of strong IP systems truly believe the idea that without an owner an asset will not be properly looked after, developed and exploited. That is the old version of the ‘tragedy’. Things are better if they are privatised. The more more we privatise the better things get. The more we view things as commodities, as properties, the better our economies will become. The further we will move towards the promise of the Market Society. Many find this argument persuasive. However, where knowledge is concerned, many others find the reverse to be true.

The reverse ‘tragedy’ was first propounded by the early ‘architects’ of the internet. As engineers, they sought to create machines and digital networks that moved packets of information form one place to another with the least amount of problems. Thus they were hostile to any technical, legal or social restriction that impeded the free movement of materials across digital networks. Interventions - whether they technological, political or ethical – would slow down or entirely blocked the development of the network computing. The technical objections made a neat parallel to ‘free market’ objections to all forms of intervention. In a direct parallel to the neo-liberal objection to the way social, cultural, legal or religious based interventions are held to ‘distort’ markets, many internet pioneers and current activists reject such intervention for both practical and ideological reasons. To them the idea of fences around knowledge is ludicrous. Internet architecture is based on free movement of information. Free copying of files is integral to computing architecture.

From this perspective a law like copyright is a problem. It is held to interrupt the logic of the system. It is difficult or impossible to enforce online. Intellectually, it is argued, it looks backward. Many people have collectively (and often anonymously) contributed to the development of digital networks. No one person was responsible for the internet. No one owner is possible or desirable. It is a collective, collaborative creative effort. It is a ‘knowledge commons’. The tragedy would not be if no owner were assigned to this commonly developed asset. The tragedy would be if the ‘knowledge commons’ was enclosed. When copyright and patents are enforced, the knowledge that makes the system work is divided into parcels of private property and fenced off. This, they argue, would destroy the collective spirit of creation and would result in the underproduction of the essential public good.

The world is divided on the question of knowledge. Should it be parcelled up into individual property rights as was the fate of the English commons? Would that give the owner an incentive to create more knowledge? Did it give the private owners of once common land an incentive to improve the land? Opinion is divided. But one thing is for sure. The divisions in the question of knowledge are articulated on differing interpretations of an economic concept that first emerged in the wake of the English Enclosure movement. My grandfather would have found it all very amusing.

A credit card is a little card made in plastic you can use if you don’t have any money.

Container-ships sailing around at the world´s seas to transport many different, nice and interesting objects.

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PDF for Learning Book #003, [Poster Dwelling; Land, Market and Economy], Delhi, 2008

Texts: From Corporate Land Grab To Land Sovereignty (Bhu Swaraj), Charter for Land Sovereignty (Bhu Swaraj) - From Corporate Hijak of Land, INDIA DIVIDED Vs INDIVISIBLE INDIA: DEFENDING DIVERSITY AND DEMOCRACY IN TIMES OF VIOLENCE, FEAR AND TERROR by Vandana Shiva

Delhi’s Urban Dilemma by Arunava Dasgupta



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