A Real Market: What Is a “Distributed” Market?

A Real Market: What Is a “Distributed” Market?

Now let’s think how we can describe markets from the perspective of “no money, no market.”

We have said that a “concentrated market” in modern economics is a fi ction.

How then could we comprehend real markets as opposed to theirs? It is time to say what a distributed market is.

A market is a “place,” in a metaphorical sense, where we buy and sell goods with money.

It is not just about wholesale markets for fish or vegetables, a securities exchange, or a foreign exchange market; shopping malls, discount stores, vending machines, ticket vendors, money withdrawn from a bank account for a fee, mail order by catalog or television, online shopping or auction sites on the Internet, and joining a company as an employee, these are all markets.

We are not always aware of it, but the market exists everywhere around us. Some markets did not even exist decades ago, e.g., e-commerce markets such as mail orders via the Internet and net shopping. Japan’s Rakuten Market, operated by a well-known fi rm, and search portal sites, like Amazon.com and Yahoo! Shopping, look like a huge online mall or a large-scale e-commerce store. Amazon. com enjoys the largest domestic sales in the world with revenue of $7.8 billion in 2012.

Rakuten follows with revenues of 443 billion yen. Rakuten’s registered membership is 82 million people. Given that Japan’s population is 127 million, about two thirds of the nation has joined Rakuten.

Of course, foreigners, stores, and businesses might be counted in addition to individual citizens. Some may have plural accounts, so that the number needs to be reduced, but it’s a big number anyway.

One thing we need to point out here: Although numerous goods are traded on a single site in the e-commerce market, this is not a “concentrated market” with no money, where relative prices only work like parameters.

Rather, it is “distributed market,” a collection of individual trades by way of money.

It’s not just large shopping malls. There are many net mail order businesses and mom-and-pop stores. Those businesses are also basically distributed markets.