Assignment 2 4/5/13

     In the first chapter of Reinventing the Bazaar, McMillan names many defining characteristics of a market, including it is a place where buyers and sellers exist, the "invisible hand" guides it, and everyone is in charge. McMillan uses a quote from playwright Vaclav Havel to sum up the benefits of a market. He says "...the only economic system that works is a market economy...this is the only natural economy, the only kind that makes sense, the only one that leads to prosperity, because it is the only one that reflects the nature of life itself" (page 7).
     Being only 20 years old, I haven't had the opportunity to observe a very wide variety of economic change or crises that would allow me to have a definite opinion on a market economy, however, I have been able to observe the economic opinions of others. It is evident to me that most people prefer a market economy to its alternatives. I believe the majority of people are against a heavy amount of government interference and thus prefer a free market economy. McMillan argues that markets are "potent antipoverty engines" where they work well. Those in underdeveloped countries who aren't aware of this concept and have seen their government intervene excessively may believe that markets do no good, aren't fixable, and are thus the reason for their poverty. The true reason for the underdeveloped state of a country is simply that the market system is not functioning properly and needs a set of rules, customs, and institutions to reverse the negative effect it is having on the economy. On the other hand, people who have studied world history probably know how centrally planned economies have turned out and are unwilling to support them due to their failure. As I said before, most people aren't in favor of excessive government action and thus would not be in favor of non-market action. Personally, I think a market economy is the best way to go and that the government should only do what is necessary to keep it running properly.
     When it comes to setting rules for a market, I think the by far most important rule is the defining of property rights. No one is going to participate in a market if they believe their property will be stolen. Another important rule is to have some sort of assurance that a transaction will take place between the buyer and seller without one getting cheated. If people don't trust each other then they'll hardly be willing to participate in a transaction.