“The End of the Market argues that the credit crunch crisis of 2008 is not a bump in the road of the liberal era, but its end. But out of the ashes of rational individualism, a new vision is emerging where the community is the defining organisation and obligations, freely accepted and willingly discharged, become the engine of human progress.”

This is by all accounts an important book for the p2p community. Any info on its author would be very welcome. We have selected more extensive excerpts here.

* Book: The End of the Market. The rise of the service economy and the death of the market-clearing price. (possible author: Edmund O’Sullivan), 2012.

From the Preface:

“The End of the Market examines how the idea of the market-clearing price eventually emerged in the final decades of the 19th century after more than 2,000 years of debate. It was finally defined in a book by a Cambridge University professor published in 1890. This was an event that history has largely ignored. But its impact has been enormous. The idea of the market-clearing price freed human beings to get on with the business of producing and consuming without pondering excessively, if at all, about the true value of what they were doing.

Without it, mass production and long-term investment would have been impossible. It distributed goods and surpluses in a way that provided sufficient incentives for people to make decisions about whether to consume today or to save for tomorrow through the impersonal mechanism of the market. Trillions of daily decisions that otherwise would have been difficult or impossible were simplified to the extent than an average 7-year old could make most of them. You just compared prices and chose.

And it allowed governments and corporations to intervene in human affairs on an unprecedented scale.

Without the idea of the market-clearing price, many of the great events of past 100 years would have been impossible.Stalin would have been unable to master the largest country on earth and Franklin Roosevelt to launch the New Deal. Nazi Germany couldn’t have developed the capacity to launch a continental war of conquest and a programme of genocide. Mao Zedong might have seized power in China, but it would have been impossible for him to retain it. And the US could not have put people on the moon on 1969 without the efficiencies the idea of a market-clearing price allowed.

There had been visionaries before. But the market-clearing price allowed dreams to be turned into reality by encouraging the discovery of new technologies that freed a growing proportion of the world’s population from the mundane task of simply producing sufficient things to survive. It wrecked many human lives, but it saved many more. For this, the market-clearing price, the distilled essence of every human aspiration, should not be lauded. It has no ego and no imagination.

There had been megalomaniacs before. But the idea of the market-clearing price empowered them to mobilise human energy and material wealth for destructive purposes without parallel in human history. Price, the apotheosis of rationality in a rational world, is responsible, but cannot be blamed. It has no conscience and can have no soul.

The market-clearing price is now such an obvious and pervasive idea that it seems ludicrous that so much, both good and evil, should be laid at its door. Violent events, wars and revolutions, scar our memories and stir our emotions. Technology, which has obviously changed the way we live, seems a much more exciting topic. Ideas stimulate our minds. But prices? Surely they are as significant in human history as advances in shopping and much less interesting. Economists who grappled with the concepts that eventually led to the crystallisation of the idea of the market-clearing price didn’t do much to help. They are the authors of some of the most incomprehensible books ever written.

For centuries, thinkers investigated what prices were using every philosophical and scientific technique at their disposal. For those who thought of themselves as economists, the issue, however, was like an untreated toothache: a persistent irritation but not life-threatening. What mattered were production, consumption, investment and saving and counseling leaders of nations and business about the best way of increasing all of them quickly. This was the route to fame and fortune, not theorising about what price was and did. More often than not, economists simply gave up wondering about price completely and got down to the practical issues of commerce and government. And when the concept of the market-clearing price eventually emerged, it was almost immediately rejected as a matter worth worrying about because it was regarded as being essentially uncontrollable, probably misleading or both. Humanity had an uncomfortable relationship with price in the 20th century. At times, we convinced ourselves we could do without it entirely, but the century ended with us all under its thumb.

But The End of the Market is not primarily an account of the origins and implications of the market-clearing price. It is about how it has now been deposed due to the rise of the service economy, the source of the majority of income, wealth and employment in every advanced economy on earth.

Like the discovery of the market-clearing price 120 years ago, this startling fact has also gone largely unnoticed. And yet it is at the very heart of the economic crisis that developed in 2007/08. The fall of the market-clearing price as the key factor driving human affairs has implications so far-reaching it is almost impossible to overstate them. In death, as in life, the market-clearing price, or its absence, will utterly change every aspect of life for everyone, everywhere.”