The Market System
A system where buyers and sellers, motivated by self-gain, freely conduct business with the goal of making profits. Another name for this arrangement is capitalism. Prompted by neither the "pull of tradition or the whip of authority," free markets are motivated by a single factor — the human urge to acquire goods.
The market system is not the simple exchange of goods which existed in primitive society, nor the commercial fairs of the Middle Ages. Nor is it a farm produce market or a stock exchange. The market system supports and maintains an entire society. Unplanned and slow to evolve, it was brought about through the most far-reaching revolution of the Western world — the Economic Revolution.
Many factors combined to cause the revolution, such as the breakup of the manorial system, the decline of guilds, the acceptance of the concepts of land, labor, and capital, the effects of the Renaissance, scientific advancement, European voyages of discovery and exploration, the emergence of modern nation-states, and the Protestant Reformation, which sanctioned the concept of profit.
The market system emerged only after bitter opposition to change by the people who tried to maintain their role in the status quo. Nevertheless, as the profit motive became respectable, the market system took shape, bringing with it the economists who satisfactorily explained the complexities of the system. In 1776, Adam Smith wrote his amazing masterpiece, Inquiry into the Nature and Causes of the Wealth of Nations, a work which helped society understand how changes in economics were leading toward a new plateau in human history.
