Mark Littlewood, director general of the Institute of Economic Affairs, talking to Raj Patel on the Today Programme:

The free market operates like a perfect rolling referendum, with the prices representing the outcome of millions of individual decisions.

The Adam Smith Institute said something similar a few years back:

Independent providers are nearer to public demand than public authorities can ever be. Their perpetual search for profitability stimulates them to discover and produce what the consumer wants. In that sense the market sector is more genuinely democratic than the public sector. It involves the decisions of many more individuals at much more frequent intervals.

(Oddly, I found that quote in New Zealand's Hansard, spoken verbatim by ex-NZ-MP John Luxton. He didn't cite, naughty man.)

I can see what they're saying, but this comparison to democracy carries risks for them. After all, hasn't the history of the past 200 years been in large part about fighting for the principle of an equal vote? If that's so, the system they're arguing for here consists of rotten boroughs walking about in human form. If the market is the ultimate liquid democracy, democratic equality would seem to require economic equality.

There's also an insidious undercurrent in this argument: if markets are a more perfect form of democracy, what use are votes? My own view of the value of democracy is pretty simple: a bunch of people collectively agreeing to be bound by something they agree is good in principle, but know that, left to their own devices, they would never do. Raj Patel mentions recent Nobel prizewinner Elinor Ostrom to illustrate that there are, in fact, a smorgasbord of options for managing resources, of which the price system is just one. I'm reading her Governing the Commons at the moment. Just as Dan Greenwood did my original PhD idea better than I could have, Ostrom - twenty years ago - proved the central point that the market-state dichotomy is a bit silly. What I like about her writing (rather than the self-organising-but-not-market examples I tend to pinch) is how democratic the systems she identifies are: a bunch of people get together and agreeing some mechanism by which they all should be bound, and the mechanism for enforcing it, whether that's paid for or - more often - some self-monitoring structure that works with people's incentives. Price signals might achieve that, in the same way that some ant species have achieved incredibly sophisticated self-organised resource management. But then, a lot of ants haven't. That's evolution for you - a bit hit and miss. Since we happen to have this ability to be able to come to deliberate collective choices (which then can work independently or either private firms or governments), it would seem a shame to not use it.