The Market and the State

The market and the state differ in their institution. The state arises out of the willful unity of the polis to deliberate about the means to achieve the common good. The market arises out of the exchanges of individuals that give rise to ever more complex exchange and contracts. The market in this sense is less real than the state, because it has no deliberate purpose or aim. Its natural aim proceeds from the movement of people to produce and exchange what they desire. There is no willful attempt to establish some collective effort to exchange numerous goods, indeed this would be a political effort. This may be part of the libertarian error in denouncing what I’ve heard called the “collectivist fallacy.”

The market has no doubt collective movements, but the market itself does not have an aim or purpose that it pursues. In contrast, the state as such exists for the establishment and protection of the common good, that is peace and safety. The market would only achieve the common good accidentally and could not replace the state as the source of the common good.

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