The Bazaar Catallaxy as an Entanglement of Public and Private Enterprise

          The word bazaar is Persian for “place of prices” and historically described an enclosed and covered area housing numerous privately operated booths trafficking in commodity goods. These markets have existed in both western and eastern cultures for thousands of years. In the book, Bazaar and State in Iran, Arang Keshavarzian defines a bazaar as “a series of socially embedded networks within a bounded space that is the mechanism for the exchange of specific commodities.” (Keshavarzian 2007). These ancient marketplaces served as the central economic institution for trade and became the hub of not only market activity, but also political, religious, and social interchange. Many large shopping malls, international airports, and even state universities of today share much with the economic model of the bazaar.

          Foundationally, the bazaar catallaxy begins with the designation of a bounded space to be used for a single primary purpose. In the case of the ancient market bazaars, this purpose was trade. This same requirement for common purpose is at the center of modern examples—transportation for airports, shopping for malls, and education for universities—each requiring the allocation of a large bounded space. The first element of entanglement of polity and economy usually begins with the acquisition of these spaces, which is easily accomplished when wielding the coercive power of government eminent domain.

          One of the largest and most successful bazaars was the Nizhnii Novgorod Fair, founded in 1817 and situated on the Balakhonskaia Peninsula at the confluence of the Oka and Volga rivers (Fitpatrick 1990). Marshaling the skills of architects under government contract, the location and construction of the fair’s infrastructure arose in much the same way airports or malls emerge today (Coburn 2011). In the Nizhnii Novgorod Fair, the regional government provided the policing and sewage control as well. Patrons tend to think of the plurality of vendors in a bazaar catallaxy as a single entity—“Do you want to go shopping at the mall?” rather than to a specific store. This perception allows the creator/owner of a bazaar to provide services as a market maker.

Figure 1

          Structurally, the bazaar consists of a set of horizontally competitive enterprises residing within the bounds of the catallaxy as shown in Figure 1(H₁, H₂, H₃, H₄, …). The horizontal business units, while competitive with each other, form a critical mass that draws not only large numbers of customers, but also vertical or supporting services (V₁, V₂, V₃, V₄, V₅, …) such as money changing, food courts, transportation, and possibly even housing. The bazaar entanglement of polity and economy increases further when the polity provides some of these ancillary services—most often policing and utilities, as represented by element V₀ in Figure 1. The vertical services in a bazaar, when not provided by the polity, tend to consist of competitive offerings. For example, in an airport there will be multiple transportation services including private automobiles, taxicabs, metro lines, rental cars, and buses. Food and shopping services will be varied, as will on-property hotels if any.

          An important phenomenon of the bazaar is the partnerships that often form between competing horizontal firms. In Afghan bazaars, these loosely bound guilds are known as quams (Coburn 2011). In airports, the airlines organize into quams as a way of dealing with difficulties such as mechanical failures, bumped passengers, and as a way of extending their market reach. If American Airlines suffers from a mechanical failure, they have the ability to electronically transfer bumped passengers and luggage directly to a competitor’s flight. These quams also extend their membership to include vertical services such as hotels for weather-stranded passengers and meal coupons accepted by airport restaurants. The close proximity and shared infrastructure of the bazaar makes this kind of collaboration simple and worthwhile to implement.

          International airports present another set of administrative challenges, because their primary purpose is cross-border travel, which requires them to deal with such things as immigration rules, import and export duties, and potentially incompatible security standards. These regulatory aspects of travel present additional opportunities, and perhaps excuses, for the polity to further imbed itself into the catallaxy.

          Whatever the primary service offering of the bazaar, the homogeneity of the horizontal competition and the well-defined nature of the vertical and ancillary services make the bazaar catallaxy highly susceptible to active participation on the part of the polity. 

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Works Cited

Coburn, Noah. Bazaar Politics: Power and Pottery in an Afghan Market Town. Stanford, 
          CA: Stanford University Press, 2011.

Fitpatrick, Anne Lincoln. The Great Russian Fair: Nizhnii Novgorod, 1840-1890. New 
          York: St. Martin's Press, 1990.

Keshavarzian, Arang. Bazaar and State in Iran. Cambridge: Cambridge University Press, 
          2007.