Competitive Markets and Social Change I

Competitive markets can change social attitudes.  Viewed from a social perspective a competitive market is impersonal.  It does not care about who you are or what you do. All it cares is how much money you are willing to spend on the good or service that the producer wants to sell.  It is indifferent to the caste, creed, color or religion of the buyer.  As the saying goes, "markets don't care about the color of the money".  If you don't believe it, ask anyone who has been to a MacDonald, Pizza hut or Cafe Coffee day. In sum, competitive markets are very egalitarian with respect to every social dimension, with the possible exception of class.  Though there are products and services that capitalize on the notion of "high class," mass markets by definition depend on volume and cannot afford to make such distinctions.

    A competitive market for a good or service is something more.  It is a "positive sum game".  Every body benefits from the availability of new products and services, cost reduction and improved quality and enhanced productivity that results from competition. That is, both buyers and sellers can benefit from the transaction,  This is particularly noticeable when a new product comes into the market.  By now the classic and much studied example is that of the ubiquitous cell phone.  Both the millions of consumers and the telecommunication companies that supply the cell phone services have benefited tremendously from this new service.   No seller of SIM cards or recharge service cares whether the customer is a Dalit or Brahmin, Black or White, Hindu or Muslim - He is only concerned about how much money you want put into his pocket.

  Similarly the rate of growth of competitive markets determines how widely and deeply the benefits of competitive markets are distributed.  The faster the growth the more visible is the benefit and the easier it is for the common man who does not understand words like 'competitive' and 'positive sum' to see and feel the egalitarian nature of markets.  Beyond a certain per capita income level and above a certain growth rate, even those who have limited personal experience (little discretionary spending) can comprehend the difference between traditional hierarchical social structures and the egalitarian sociology of the market.  Even those who have just crossed the threshold of subsistence are able to see the difference it is making to others who were only a little better situated in the existing cast and other social hierarchies.  This is the beginning of social change.  This in my view is what has started happening in India.