What are Social Markets?

The book Plurality's plan for remaking markets. Markets connect strangers around the world more widely than anything else, but as a form of collaboration they are the simplest. Social Markets try to keep that reach while building public goods, sharing and human connections into the workings of prices.

Every day we buy things made by people on the other side of the planet whom we will never meet. Money and markets are a very powerful way of connecting strangers on a global scale. But markets are bad at producing things that are "for everyone", such as software anyone can use for free, or clean air. Social Markets are an approach that tries to fix this weakness while keeping the strengths of markets.

In short

Social Markets is the book ⿻ Plurality's plan for remaking markets, set out in the last chapter of Part 5 (chapter 5-7) [1][2].

According to the book, markets connect strangers across the world more widely than anything else, but as a form of collaboration they are the simplest. Social Markets try to keep that breadth while building public goods, sharing and human connections into the price system [1][2].

For example

Donations to open source (Gitcoin Grants). Software that anyone can use for free (open source) is always short of money. According to the book, in earlier systems for matching donations, wealthy participants such as corporations "could command most matching funds". Platforms such as Gitcoin Grants use a formula that takes into account not only the amount given but also the diversity of the donors and their groups, and have channeled "in total more than a hundred million dollars in funding". The book writes that "This has been especially important to Web3 related projects, in Taiwan, and in supporting this book" [3]. For details, see the article on Quadratic Funding.

Self-assessed land values in Taiwan. In one system, owners declare the value of their own property, and must sell at that price if someone wants to buy. According to the book, this was proposed by thinkers including Sun Yat-sen and the economist Arnold Harberger, and has long been used for land in Taiwan. Recently it has also been used for digital art works [4].

Making the book itself. The book recorded the kinds and amounts of participants' contributions, and used the mechanisms of Part 5 to decide which work to prioritize and which to accept [5][6]. The book presents this as an example of keeping some important components of hierarchy (such as evaluation by trusted authorities) without any direct boss-and-subordinate reporting structure. → Plural Management Protocol

In more detail

What markets do well, and what they assume

The book acknowledges: "No institutions connect more people across broader social diversity in collaborative exchange than those of global capitalism". "The almighty dollar (and yuan) is respected in most corners of the planet", and international trade agreements "are among the strongest and nearly universally respected agreements" [1].

At the same time, the book points out the assumptions on which the case for markets rests. It pictures a two-party deal between a buyer and a seller; each is one of many similar, and so equally powerless, buyers and sellers; and the effects of the deal stay within fixed property rights, without spilling over onto others. Group effects that are more than the sum of the parts, shared goods and differences between people are "bracketed as 'imperfections' or 'frictions'", the book writes [1].

Four limits of markets

The book lists four limits of markets [7]:

Increasing returns and public goods. Where work becomes more efficient the more people join forces, paying everyone their marginal contribution yields a loss. So markets produce too little of this kind of collaboration.
Market power. Big companies become too powerful.
Externalities. As with pollution, harm falls on people who were not part of the deal.
Distribution. Wealth ends up unevenly shared.

The book sums up the first like this: "perhaps the greatest paradox of global capitalism is that it is at once the largest scale example of collaboration and yet has trouble precisely supporting the forms of technological collaboration that it heralds" [7]. It also says that today's remedies, such as antitrust, labor unions, subsidies and redistribution, have their own limits: they tend to be rigid, struggle to cross national borders, are run by administrators with too little information, or get captured by interested parties [8].

Tools for Social Markets

The book lists tools such as the following, in a line of thinking descended from the 19th-century economist Henry George [4][9]:

Partial common ownership. The self-assessed property value system described above.
Quadratic Funding. A fund matches individual donations. In the book's words, the matching funds "should be proportioned to the square of the sum of square roots of individual contributions, giving greater weight to a large number of small contributors than to a few large ones".
Stakeholder corporations. Cooperatives in which workers and users also take part in running things, data unions, and forms such as those of OpenAI and Anthropic, organized as partial non-profits.
Participatory design and prediction markets. For example, systems in which users suggest ideas and the popular ones become products.
Economies of esteem. Non-monetary recognition such as badges and followers.

As further-off ideas, the book also lists mechanisms that allocate funds across borders and generations (a footnote mentions Ken Suzuki's PICSY from Japan), and a migration policy in which moving to a country is conditioned on endorsement by civil society groups there [6].

Why markets are still needed

The book's conclusion is that even well-remade markets "remain a thin shell", and at best should "fade into the background" of the richer relationships they support. "What we must guard against most rigorously", it writes, "is the tendency of markets to concentrate power in private organizations or limited cultural groups in ways that homogenize and erode diversity" [10].

Even so, the book says markets should not be abandoned, because something is needed to coordinate coexistence between the most distant people. Other ways of doing this, "even ones as thin as voting, carry much greater risks of homogenization precisely because they involve deeper ties". In the book's words: "Socially aware global markets offer much greater prospect for ⿻ than a global government" [10].

What is debated

It is not market fundamentalism. The book itself writes that "the potential of markets should not be mistaken for being a miracle cure or the primary pattern for the future of ⿻" [10].
The term "public goods" has been stretched too far. In 2025, Vitalik Buterin, the founder of Ethereum, argued that "public goods" has been stretched in meaning: it is used to mean things governments make, and even commercial projects claim the label. As a result, he says, public goods funding invites the view that it picks things that merely sound good and benefits insiders [11].
Matching funds can be captured. Audrey Tang (唐鳳) has said that with government matching subsidies, anyone with enough money can take most of the funds even for projects without broad support. Under the square-root mechanism, your own money counts only for its square root, so, Tang says, projects began bringing many people in and cooperating with each other [12].
Lessons from the earlier book. In 2020, the economist E. Glen Weyl, one of the book's authors, looked back and said that the fundamental weakness of his earlier book Radical Markets lay in viewing people as isolated individuals and in designing society from the top down [13]. This overlaps with chapter 5-7's statement that recent designs "have stretched beyond traditional individualistic designs to account for ⿻ group interests and affiliations" [9].

Where it fits in Plurality

Part 5 of the book arranges seven forms of collaboration among different people by "depth" and "breadth". Social Markets come last, at the broadest and thinnest end [14]. The preceding chapter, ⿻ Voting, ends with the limits of voting and hands over to markets, "the thinnest of all the substrates for collaboration" [15].

The book places the collaboration technologies of Part 5 on top of the foundation of the "rights" of a digital society covered in Part 4, such as property, contract and commerce [5]. The overall picture of these foundations is explained in the article on the rights operating system.

In his review of the book, Buterin quotes a passage from its conclusion as evidence that Weyl and Tang see reformed markets and property as the best candidate for the largest-scale global cooperation [16].

Sources

Plurality, 5-7 "Social Markets", introduction — https://www.plurality.net/v/chapters/5-7/eng/ ［CC0］
Plurality, chapter summaries (Chapter 5-7) — https://github.com/pluralitybook/plurality/blob/86158859464aee75633acd854c656928121a7fd8/contents/english/8-blurb.md ［CC0］
Plurality, 5-7, opening (Gitcoin) — https://www.plurality.net/v/chapters/5-7/eng/ ［CC0］
Plurality, 5-7 "Social markets tomorrow" — https://www.plurality.net/v/chapters/5-7/eng/ ［CC0］
Plurality, 5-0 "Collaborative Technology and Democracy", introduction — https://www.plurality.net/v/chapters/5-0/eng/ ［CC0］
Plurality, 5-7 "Frontiers of social markets" — https://www.plurality.net/v/chapters/5-7/eng/ ［CC0］
Plurality, 5-7 "Capitalism today", on the limits of markets — https://www.plurality.net/v/chapters/5-7/eng/ ［CC0］
Plurality, 5-7 "Capitalism today", on existing remedies — https://www.plurality.net/v/chapters/5-7/eng/ ［CC0］
Plurality, 5-7 "Social markets tomorrow", Quadratic and ⿻ funding — https://www.plurality.net/v/chapters/5-7/eng/ ［CC0］
Plurality, 5-7 "Limits of social markets" — https://www.plurality.net/v/chapters/5-7/eng/ ［CC0］
Vitalik Buterin, "We should talk less about public goods funding and more about open source funding" (2025) — https://vitalik.eth.limo/general/2025/03/29/pubos.html
DISTANCE.media, Japanese translation of a conversation with Audrey Tang (2024-04-09, in Japanese) — https://distance.media/article/20240409000196/
E. Glen Weyl, "Why I Am not a Market Radical" (2020) — https://www.radicalxchange.org/updates/blog/why-i-am-not-a-market-radical/
Plurality, 5-0 "The depth-breadth spectrum" — https://www.plurality.net/v/chapters/5-0/eng/ ［CC0］
Plurality, 5-6 "Limits of ⿻ voting" — https://www.plurality.net/v/chapters/5-6/eng/ ［CC0］
Vitalik Buterin, "Plurality philosophy in an incredibly oversized nutshell" (2024-08-21) — https://vitalik.eth.limo/general/2024/08/21/plurality.html

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