Weaving the Market

 

32. Weaving the Market: Traders and Contract Rural Hand-weaving Sector in Laos

OHNO, Akihiko. March, 2017.

 

Description

Great expectations are placed on the development of rural household non-farm industries, which are more labor intensive and make fewer demands on scarce capital resources than modern large-scale counterparts do. However, placing local products in nationwide market is a hard task for rural producers due to insufficient development of the market.
Traders have been neglected by mainstream economics textbooks. In addition, economists, such as Hicks and North, claim that the evolution from personalized exchange to impersonal exchange, supported by legal sanction mechanisms, is central to the process of growth and development. However, such mechanisms are defunct at incipient stages of economic development.
This book deals with market development when formal sanction mechanisms have yet to be implemented effectively. It argues that the emergence of traders in peasant societies is essential to facilitate market formation because traders formulate a set of Hayekian spontaneous orders to govern market transactions. Such orders are supposed to substitute formal market governance mechanisms to avoid the state of nature in market transactions.

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