[OPE] Market confidence and consumer confidence

Jerry,

For me there is a difference between market confidence and consumer confidence. As I will explain in my book in more detail when I get a chance to write it, both these concepts are ideological, but like any ideological concept, they have a kernel or grain of truth (an elementary credibility), without which they would not be used at all.

Market confidence refers to the general propensity to engage in trade, based on the expectation that it is advantageous (you will gain more than you lose from doing so, rather than lose more than you gain). Consumer confidence is more a special case of market confidence, because it refers only to consumer items (final or finished goods and final services).

One aspect that makes such concepts ideological is that often people are forced (compelled) into trading, regardless of whether they think it is advantageous or not, in other words, they cannot very well stop trading, because a Marxist tells them that trade is "evil", and money is the "root of all evil", the "value-form" will bite them in the bum, etc.

So the notion of economic confidence is stongly linked to notions of market freedom, in which people have all kinds of choices, but if they do not in reality have those choices (or more precisely, if one social class has a lot of choices and another class doesn't, i.e. the choices of some are conditional on the lack of choices by others), the concept is ideological. Obviously we all have a choice, but some of us have a lot more to choose from than others.

The ideological subtlety in the debate is that the choices there are, depend partly on how you perceive things, and thus an ambiguity arises about whether the individual or objective circumstances are mainly responsible for the choices that are made. In my critique of Amartya Sen's philosophy I develop this point in more detail.

Jurriaan

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Received on Fri Mar 13 12:07:02 2009