Markets for Collective Concerns, Market Failures, and Policy-making

by Christian Frankel, José Ossandón and Trine Pallesen*

As Foucault (2008) pointed out 40 years ago, the economic thinking of the Ordoliberals in Germany, the Chicago School in the United States, and Austrian economists such as Hayek, represented an important shift in the way social problems are conceived and governed. As these ideas were implemented more widely, the market acquired a new type of function (Dardot & Laval 2013; Mirowski 2013). Markets – or some of the features attributed to markets, such as choice, competition and price – started to be purposely introduced as means to solve pressing collective problems or concerns. Markets became instruments of policy in areas such as health care, public transport, education and environmental pollution. Such markets are the focus of a special issue of Economy & Society we co-edited, titled “Markets for Collective Concerns and their Failures”. We use the term markets for collective concerns to name this particular object of study.
The papers in this issue offer careful empirical descriptions of what happens after the implementation of markets for collective concerns. What the research presented in this issue shows is an important transition: from a form of policy-making that assumed that, once implemented, markets work on their own, to situations in which policy-making is understood as continuous market organization. Policy-making becomes the evaluation, diagnosis, design and repair of markets. This new form of governing is the important societal problem this issue helps us to better understand. The ‘organization of markets for collective concerns and their failures’ names the new terrain explored in this issue.
Besides our introductory piece, five contributions comprise this issue. The first four papers are case studies: Ossandón and Ureta study the markets for public transport and health care in Chile; Reverdy and Breslau, the market for wholesale electricity in France; Doganova and Laurent, markets for emissions, sustainable biofuel and clean technologies in Europe; and Neyland, Ehrenstein and Milyaeva, markets for electronic waste and childcare in the United Kingdom. The fifth paper, by Nik-Khah and Mirowski, provides the intellectual context for this important development. They trace the transformation in economics, from a professional consensus that assumed that markets were the opposite of planning, to the current context in which economists claim to be experts in the design of markets.
Despite the differences in terms of their thematic and geographic scope, the inspection of the discourses and practices involved in governing collective concerns with markets show important similarities. First, the different cases of markets for collective concerns have been problematized as failures by the relevant actors in these different fields of inquiry. Even more significantly, the different cases show that failure does not pave the way for the introduction of non-market forms of solving collective problems. Instead, the cases show an important reorientation in the practice of policy-making and the consolidation of new types of policy-making expertise. These experts are not simply market enthusiast; their claim to expertise is that they know how to assess, identify and repair market failures. For the relevant experts in the different cases presented here, the problem of how to make particular markets work well becomes, to use an ANT expression, ‘the obligatory point of passage’. Policymaking becomes market organization.