Constituting markets: The case of Russia and the Czech Republic

What is the role of states in creating market order and competition? In the early nineties the dominant answer to this question was that the best way states could contribute to the emergence of market order is to reduce their role within the economy and liberate economic activity from state intervention. Once the necessary level of economic freedom has been attained, once economic activity became a private business by way of liberating prices and trade and privatizing property, market order and competition will come about. This was the advice given to the post-communist countries by the international financial agencies that have measured progress in economic reform in the attained level of economic freedom, and this idea played the dominant role in the choice of policies introduced in the countries of the region. Behind the idea that it is freedom from the state that is the necessary condition for the emergence of market order, one can find two interrelated beliefs. The first is the (not so neo-)liberal belief in the capacity of self-regulating markets to generate by way of the free pursuit of self-interests the norms of behavior and rules of conduct necessary for maintaining market order and competition. The second is the belief that states are anyway solely the sources of economic disorder.