John McMillan

Reinventing the Bazaar

The stallholders, who are mostly women, sell fish, vegetables, grains, canned foods, and basic household items. They operate on a tiny scale, a typical day's turnover being just a few dollars. The marketplace, housed in several large dirt-floor sheds, is overcrowded and dusty. The press of people, the noise, and the smell of fish overwhelm a visitor.

First impressions are misleading. Primitive as it may look, the Makola market is an intricate system. The stallholders are not just retailers but also wholesalers: they buy in bulk to sell small quantities to consumers, and they aggregate small purchases for resale to other sellers. They organize the transportation of goods—not a simple matter in a country with inadequate roads and railroads—serving as intermediaries between widely scattered producers and consumers. They do some rudimentary manufacturing: Grafting with beads and processing raw materials into foodstuffs, condiments, and cosmetics. They find recycling uses for cans, bottles, and newspapers. Assessing their customers' creditworthiness and granting some of them credit, they take on the role of banks.

Being illiterate, the stallholders must keep their business records in their heads, using impressive powers of memory. They make precise calculations of their input costs so as to keep track of their profits. The price a vendor charges for a string of beads, for example, reflects the price she paid for the beads and thread, the time she or her employee spent stringing the beads; and her target profit margin.

The stallholders have developed their own miniature legal system. Informal property rights have arisen. Although they do not have legal title to their stall space, which is technically owned by the Accra city council, they act as though they do. Spaces are inherited. Often the current stallholder acquired the space from her mother or sister. Spaces are also rented, bought, and sold. Certain respected merchants, called 'queen mothers,' play the part of judges, arbitrating when disputes arise.

Gains from trade are generated. The vendors make others—as well as themselves—better off by making food available to the urban poor, and by providing income to farmers with which to buy necessities like clothing. Thus they exemplify Adam Smith's analysis of the merchant: 'By pursuing his own interest he frequently promotes that of society more effectually than when he really intends to promote it.'

The Makola marketplace has continued to operate despite periodic, sometimes violent attempts by the Ghanaian government to shut it down. These attempts reached a height of brutality in 1979 after the military government accused marketplace traders of violating its price controls. Soldiers looted the stalls and then dynamited the marketplace. Later, in the town of Kumasi, soldiers armed with machine guns raided the marketplace and beat up the traders. Accusing one of profiteering, a soldier ripped her baby off her back and shot her. Bulldozers then ground the marketplace stalls into the dust. A soldier remarked, 'That will teach Ghanaian women to stop being wicked.'

The Ghanaian government, invoking the 'market women menace,' was using the merchants as a scapegoat for its own policy failures, which had led to severe shortages and inflation. Newspapers parroted the government's line. One described the market demolition as a 'happy tragedy' which produced 'tears of joy in the worker, the common man,' who was 'helpless at the hands of the unfeeling Makola conspirators' (that is, the vendors).

Within a week the merchants were back where their stalls had been, selling their fish and vegetables, though now without a roof over them. The Makola traders' accomplishments, Robertson wrote, 'have been triumphs of intelligence, determination, and sometimes desperation.'

An American case of the spontaneous development of markets came during Prohibition. From 1920 to 1933 it was illegal to sell alcohol in the, United States. In spite of the law—or perhaps because of it—the liquor trader flourished, as respectable people flocked to illicit bars, or speakeasies. Prohibition had its costs. Thirsty drinkers paid exorbitant prices, as the need to do business covertly meant transaction costs were high. Prices were pushed up threefold. Some of the liquor was toxic, manufactured from dubious ingredients. Gangsters like Al Capone tried to monopolize the liquor trade, murdering their rivals and corrupting police officers.

Despite all its efforts, the government utterly failed to squelch the alcohol market. Alcohol consumption, toward the end of the Prohibition era, was still about two-thirds its pre-Prohibition level. 'Detesting the interference with their liberties, sober and high-minded Americans, who had hardly ever touched liquor before, now made it almost a point of honor,' says Scottish historian Sir Robert Bruce Lockhart, 'to drink on all social occasions.' The bizarre episode that was Prohibition brings to mind a line from Robert Burns: 'freedom and whisky go together.'