In previous societies, one's status as a peasant, artisan or merchant often defined one totally. Being a member of a guild, for example, encompassed a complete set of social roles -- economic, legal, political, and even religious. Modern market society, by contrast, is based upon looser, more temporary associations, founded to pursue specific economic, cultural, or political interests. Such associations demand only a small part of the individual, sometimes only a monetary contribution in the form of dues. As a result, the modern individual can belong to a greater range of groups, but groups which are looser and less all-encompassing. In contrast to earlier forms of association, modern associations allow for participation without absorption. They make it possible for the individual to develop a variety of interests and to become involved in a wider range of activities than would otherwise be possible, yet to do so without surrendering the totality of his time, income, or identity to any particular association, from the family to the state.
Anthropologist Alan Fiske has identified four modes of transactions among people: communal sharing (to each according to his needs); authority ranking (hierarchical rulers); equality matching (taking turns); and market pricing. Of these four modes of interaction, I believe that market pricing scales the most gracefully.
Communal sharing does not work in groups larger than an extended family or clan, because trust breaks down among larger groups. There is the well-known "rule of 150" in sociology, which is that it is not possible to know more than about 150 people well enough to have sufficiently strong social ties that no formal rules are required.
Equality matching, such as taking turns at a four-way stop, works when there is a natural convention that makes equality easy to define and natural to implement. When equality is ambiguous or the convention is not readily understood and adopted, it fails.
Authority ranking can achieve scale in the form of a dictatorship, but only at immense economic and moral costs. Rulers must focus on repressing competing elements of power.
Market pricing, as Muller points out, allows people to engage and disengage with strangers on a flexible, voluntary basis. In my view, this makes market pricing the best mode of interaction for large, complex societies.
The way that I look at it, people on the left tend to think of government as a way to bring communal sharing to bear on the otherwise harsh forces of the market, which many on the left see as a system of authority ranking (the rich dominating the poor). People on the right instead tend to see government as an authority-ranking alternative which is less moral than market pricing.
For Discussion. Does the market facilitate "loose, temporary associations" as described by Muller, or opposing classes as described by Marx?