Abstract

While markets are important mechanisms for coordination of social exchange it has to be looked at their limits and preconditions as well. This paper advocates three claims: First, under conditions of externalities and asymmetric distribution of information the eflicient functioning of markets depends on non-market institutions. Second, social limitations of the expansion of markets reflect a value-realm in which society constitutes itself. These values, though they change, are normatively immune against efficiency consideration. Third, the rational-actor model of economics is insufficient for the understanding of the non-rational preconditions of markets and the embeddedness of markets in social values.