TECHNOLOGY AND ECONOMY 



15 



prices are established over longer periods of time 

 in all of the market places together; hence there 

 tends to be a competitive market. The price 

 itself of course varies with the product, the season, 

 the distance of the market from the center of its 

 production, and so on. Beyond such accidental 

 factors as the toughness and business acumen of 

 the merchant and upon his immediate financial and 

 other circumstances (a sick child at home may 

 cause a vendor who needs money quickly to accept 

 a lower price and possibly depress the whole 

 market) prices are fixed in accord with the usual 

 ways of the market. 



This is so even when recourse is not had to 

 the common, open market place. In Panajachel, 

 where merchants come to the farm and bargain for 

 beds of onions even before they are harvested, the 

 farmer calculates his chances of getting more by 

 har\-esting the onions, taking them to market, and 

 so selling them at wholesale or retail. In doing 

 so he calculates the value of his time; and in doing 

 so, both he and the buyer also use their knowledge 

 of what market prices are apt to be when the onions 

 are taken to to^vn. Since there are several mer- 

 chants going the rounds, and since there are many 

 onion growers, here again competition enters the 

 picture. The price is established in a particular 

 case in terms of the various factors that enter in; 

 and that price in the particular case influences 

 what may be called the market price. 



Since most of the people in the region are 

 illiterate it may be questioned whether they are 

 capable of the mental bookkeeping that is involved 

 if we arc to call them economically wise. Are they 

 able to figure their costs of production with some 

 accuracy? I think that in most cases the answer 

 is unequivocably in the affirmative. In Pana- 

 jachel where I laboriously calculated costs of pro- 

 duction I had frequent occasion to remark the 

 accuracy of the estimates given by the Indian 

 producers themselves. They know when they are 

 doing well and when they are doing poorly. My 

 favorite example is the woman weaver with whom 

 I spent some days calculating the costs of various 

 garments. She wove her garments for the use of 

 her family, and never — as far as I know — made a 

 practice of selling her textiles. Yet when I fin- 

 ished my silent paper calculations, taking into 

 consideration the value of her time as well as of the 

 materials, she could tell me almost to the half- 



penny what the result should be; and if I did not 

 have it, I — not she — was wrong. 



This rather impressionistic description suggests 

 that the regional market '' — whether thought of 

 in a general or abstract sense, or as the market 

 place — may be characterized as perfectly com- 

 petitive insofar as it tends to be (a) atomistic, (6) 

 open, (c) free, and (d) based on "rational" 

 behavior. 



(a) It is atomistic, of course, in that the 

 buyers and sellers are small (no one of them able 

 significantly to affect the market) and act inde- 

 pendently of one another. Characteristically, a 

 number of small vendors of identical merchan- 

 dise — standard ])unches of onions, or peanuts sold 

 by the pound, for examples — sit side by side in 

 the market place, competing for the money of a 

 large number of equally small and independent 

 buyers who appear during the space of a few hours 

 to pm'chase the same merchandise either for con- 

 sumption or for resale. Likewise, an employer 

 is able to choose among a number of potential 

 workers, independent of one another; and each 

 worker characteristically has a choice of employers 

 none of whom is so large as to affect the wage 

 rates substantially more than the others. 



(6) It is open in that there is no barrier to new 

 competitors entering or old ones leaving the 

 market. I have never heard even a suggestion 

 of an attitude that vendors or classes of vendors 

 ought to be excluded from a market, much less 

 any organized effort to do so. 



(c) The market is relatively very free in that 

 prices arc set by the interplay of supply and 

 demand with almost no authoritarian regulation. 

 I detect three kinds of "interferences" to the 

 "free play" of the forces of supply and demand. 

 The first, which hardly needs discussion, is that 

 of the wider world economy. Since the local 

 economy is not autonomous, events in the world 

 (wars, depressions, etc., and the less startling 

 economic changes) influence local prices, which 

 are not, then, determined wholly by the free play 

 of local buyers and sellers. 



The second class of mterferences are those 

 caused by Government intervention. Leaving 

 aside the monetary system, to changes in which 

 the regional economy must adjust, the more 



" Here defined as any given area] and temporal space In which a given 

 commodity is sold for a fixed set of prices; "the market" includes all insti- 

 tutionally recognized exchange relations. 



