Market and Institutions

This paper is divided into four parts. In Section 1 some meanings of the term ‘market’ are discussed, with special emphasis on the sociocultural meaning of market, namely on the market cultural attitude that results from self-interest as it is perceived and operates in certain specific cultural contexts. We are then led, in Section 2, to an analysis of the role of institutions in shaping the economic system and in assuring its structural stability. This is followed by a consideration of the shortcomings of some of the approaches by which economists analyse the strategies of firms that have to take into account, not only the behaviour of their rivals, but also that of government, parliament and social groups. In Section 3 we examine how the market affects the working of institutions, more specifically of the political system. We show that it is not possible to partition the social system into economic and institutional-political systems. In Section 4 we face some theoretical problems concerning the link between market and institutions and try to visualise the conditions for a workable state with efficiency and justice.