None, because "markets" are about recognizing that information is dispersed in all social systems, and that the problem of society is to find, devise and discover institutions that incentivize and enable people to make the right decisions without anyone having to tell them what to do. The idea that market forces should be limited stems from a fundamental error in beliefs about markets. This is the wrong question.
-Vernon Smith
The market process is needed to generate the data of the market. The market process is generative. Guided by price signals, entrepreneurs are actively trying to figure out the nature of the demand on the market. When we speak of the ‘market data’ we aren’t speaking of facts that exist independently of the market. Instead, we are speaking of facts that only become known once the market has created them. The market data are therefore a raison d’être for the market process and the competition between entrepreneurs that constitutes it. If we could secure that data sans the markets, then the human mind would be able to supersede the market process.
Nevertheless, economists have often erred in treating of the market data as existing apart from the competition that exist between entrepreneurs and have therefore criticized competition as inefficient because it leads to outcomes the economist deems undesirable. Yet, in making such a judgment, the economist is assuming that he knows the market data before the markets generate them.
Dennis H. Robertson fell into that error in his classic Banking Policy and the Price Level when he argued that inappropriate fluctuations in industrial output were caused by competition:
The main reason for which the actual expansions of industrial output which occur are greater than the relatively most appropriate expansions, seems to be the stress of competition, aggravated by the length of time which is required to adjust production to a changed demand. If conditions are such that our hypothetical producing-group would be furnished with a rational inducement to a 10 per cent. Increase of output, but if, in fact, the trade is organized into fifty independent and competing firms, it is quite likely that each firm, regarding itself as the special protégé of Providence, and ignorant of the preparations that are being made by its neighbours, will prepare to provide, say, one-twentieth instead of the appropriate one-fiftieth of the appropriate total increase in output, so that total production is increased by 25 per cent. instead of by 10 per cent. (Robertson 1949: 37-38).
Here, Robertson assumes that producers are simply reacting to a well known shock, and that all that remains is for producers to adapt to that shock. He distills entrepreneurship to solving a technical economic problem, and in doing so ignores that it isn’t clear to anyone that production should increase by ten percent.
Maybe God knows, but He isn’t giving out consulting advice. Instead, the process of competition, the very same process which Robertson blames for creating irrational adjustments in production, is the manner by which producers discover the demands of the market and how much output is desired by consumers.
The minute that one draws a neat supply and demand diagram, as one would have to figure out that the ‘appropriate’ shift in supply is by ten percent, one assumes away, at least in its allocative sense, the economic problem that the market solves: What people want and how best to supply that.
Producers aren’t simply passive mechanisms that turn market data into market output; instead, they are forward-looking entrepreneurs who have to speculate about the future constellation of supply and demand. The market then selects those entrepreneurs who supplied the consumers with their most urgent wants. So, rather than simply reacting to the data of the markets, producers are generating its data by making conjectures about what are the consumers’ most urgent wants and then the survival of the producers who successfully speculate about those needs. Market selection and entrepreneurship thus interact to generate the data of the market.
The market process is ergo generative. We cannot speak about the outcome of the market process without having studied its history. And here we reach our ultimate conclusion: As an evolutionary science, economics is by definition a historical one. If order is to be defined in the process of its emergence, then we have to have knowledge of the unique process behind the generation of each unique order. That requires knowledge that goes beyond the merely formal into the material.