Are Markets Everywhere?
and is replicated here as part of the SERC Pedagogic Service.
In this project, students will consider the formal institutional definition of markets, followed by two specific assignments. First, a brief in-class discussion will consider the specific example of the allocation of kidneys among patients, and ask the students to discuss the applicability of the definition of markets to this example. Second, students will then consider a creative commons text by Lawrence Lessig, Remix, and consider his definition of sharing, commercial, and hybrid economies. A brief paper is assigned to apply Lessig's definition to specific internet websites.
Context for Use
Description and Teaching Materials
1. Definition of the market (document and power point files)
2. Alternative definitions of markets within economics (document)
3. Example of debate: is there a market for kidneys? Should there be a market for kidneys? Drawing upon Op Ed by Gary Becker, available from Business Week, 1/20/97; additional news coverage of the debate on markets for kidneys.
4. Lawrence Lessig, Remix (available free from Creative Commons)
5. Michael Sandel, videos on Fora TV
6. Assignment: select an internet service. Determine what type of economy it is, sharing, commercial, or hybrid. Explain, using the criteria from Lessig. Make use of cost analysis to predict pricing strategy (including MC = 0 and price = "free"). Predict the durability of this particular model.
Definition of the market (PowerPoint 1.2MB Jan12 13)
Alternative definitions of markets (Microsoft Word 31kB Jan12 13)
Is there a Market for Kidneys? (Acrobat (PDF) 74kB Jan12 13)
Market Forces vs. Economic Forces (Microsoft Word 31kB Jan12 13)
Remix, by Lawrence Lessig (Acrobat (PDF) 2.2MB Jan12 13)
Teaching Notes and Tips
This formal definition of markets then enables a discussion of "varieties of capitalism," in which different countries have different combinations of market, non-profit, and state, for different products and services. It also enables the discussion of institutional shifts historically and prospectively.
Questions such as whether or not markets for kidneys exist and should exist can be the subject of debates in class, where students are then exposed to the existence of different points of view, all of which can be justified.
References and Resources
Resources for Michael Sandel discussion regarding the importance of "what money can't buy," one of his recent books:
19 separate sections from Chautauqua program
Sandel article on the desirability of the universal extension of markets from The Atlantic magazine from April, 2012
On YouTube, search for Michael Sandel videos, where there are several from which to choose.
On Google search for Michael Sandel videos and locate brief interviews on What Money Can't Buy on the Colbert Report
Resource for Lawrence Lessig's notion of "sharing economy"