Economic exchange is often seen as a cold and calculating endeavor—entirely self-focused and impersonal, with sole attention on price and profit and, thus, little regard for actual human needs or well-being.
Such a view fails to recognize that trade is more simply the manifestation of human partnership, and, seen rightly, such partnership is filled with positive social and moral implications.
In a recent lecture for the Oikonomia Network, economist P.J. Hill highlights the profound social connections that markets can help to facilitate, while acknowledging the gaps that are likely to remain without proper attention from the rest of civil society.
Hill argues that the market economy is a unique and indispensable mechanism for human connection, acquainting close neighbors and distant strangers alike. Far from leaving us isolated in our own individualized bubbles—detached from the global community—markets provide a context through which “profits and property rights are the primary means of social coordination among people who don’t know each other well.” It’s up to us how much we actually want to harness that potential.
“We need far more than markets for human flourishing,” Hill explains. “But I also see markets as important for extending the ways in which we can serve others. They enable us to exercise our stewardship responsibility over creation and they provide opportunities for productive and purposeful work.
In explaining the overarching social dynamics, Hill offers three distinct lessons that can help shape our thinking in how markets help channel our social natures as human persons. (I’ve paraphrased each in my own words with Hill’s actual quotes underneath.)
1. Markets help us connect our good intentions to human needs.
Some see good intentions as sufficient to overcome the information and incentive problems of coordination across time and space. Intentions are important, but once we move beyond the most personal of interactions, we desperately need information about the needs and abilities of others. A price system is a marvelous mechanism of information generation that allows us to know about and respond to other people—all image bearers—who deserve our best efforts to serve them.
2. Markets transform competition into social collaboration.
I’m continually perplexed by how many scholars see markets as primarily about competition. It is true that in a market economy there are forms of competition. But there is also massive cooperation. In fact, firms and individuals are really competing to see who can cooperate the best.
3. Markets aren’t the only mechanism for service, sociability and cooperation.
Price signals do not give us a complete measure of what should count as the only measure for human flourishing…We don’t want all aspects of our humanity to be coordinated by market signals. Prices do a good job of allowing people who do not know each other well to interact. But if we only focus on that means of social coordination, we will miss much that is important for human well-being, and we will actually destroy the social relationships and beliefs that are crucial for a healthy society.
Taken together, we begin to see the bigger of our role in the broader economic order and the civil societies we each inhabit. Far from acting as a mindless cogs in a grand economic machine, we have the opportunity to embrace our roles and activities as servants, creators, and collaborators in everyday economic life.
Further, we get to reimagine our activities that might appear to be outsideof that sphere—tending to our families, neighborhoods, and social or religious institutions, knowing full well of the foundations we’re laying for whole-scale social and economic abundance.