Emporiophobia (Fear of Markets): Cooperation or Competition?
21 Pages Posted: 29 Nov 2013
Date Written: November 27, 2013
There is widespread emporiophobia (fear of markets) and this has important policy implications as it leads voters to demand anti-market policies. There are many reasons for this anti-market attitude. However, economists could reduce emporiophobia if we stressed cooperation rather than competition in our writings and policy discussions. In a sample of introductory textbooks, competition is mentioned on average 8 times as often as cooperation. The fundamental economic unit is the transaction and transactions are cooperative. The benefit of a market economy, increased consumer surplus, comes from cooperation through transactions, not from competition. Competition in a market economy is competition for the right to cooperate. Competition is important because it guarantees that the best cooperators will win and because it establishes the efficient terms for cooperation, but cooperation is fundamental. For most people, competition has negative connotations as it focuses on losers, while cooperation implies a win-win situation. As an example, if we say “Wal-Mart outcompeted its rivals” we think of losing firms being bankrupted. If we say “Wal-Mart did a better job of cooperating with its customers” we think of the benefits created by Wal-Mart. Economists in our policy and textbook writing should strive to use the second sort of locution, not the first. Other implications involve the morality of the market, “giving back,” and characteristics of market failures.
Keywords: emporiophobia (fear of markets), cooperation, competiton
JEL Classification: A10, A11, A13, A22, P10
Suggested Citation: Suggested Citation