The institution through which goods, services, labor, and capital are allocated by decentralized exchange between buyers and sellers, governed by price signals rather than central direction. Markets are among the oldest and most consequential human institutions: they emerged independently across civilizations, connected distant producers and consumers, generated the price information on which complex economies depend, and became the primary mechanism of capitalist organization — while remaining objects of profound disagreement about their scope, effects, and the conditions under which their outcomes are legitimate.
Before markets, if you had grain and needed cloth, you needed to find someone who had cloth and needed grain, and hope your needs matched exactly. This is the double coincidence of wants problem — it makes trade so difficult that complex economies are impossible. Markets solve it. Money solves it. Price solves it. The market mechanism — a system for matching buyers and sellers through price signals — is so fundamental to modern life that it seems like nature rather than invention. It is invention. And understanding what it does, what it cannot do, and why reasonable people disagree so sharply about it is essential to understanding almost everything about how modern societies are organized.