My grandfather was a mechanical engineer who worked for the British in World War II. His job was to go around to small private workshops and get them to make essential weapons components. At that time throughout Britain people were contributing to the war effort by growing their own food, collecting scrap metal, organizing neighborhood patrols, etc.. Similar things happened in all the heavily involved countries. In other words, when society REALLY needed weapons, they abandoned market mechanisms because market mechanisms by themselves didn't work well, and never have.
In fact, the ability for markets, as such, to coordinate activity is vastly exaggerated, and the claim that the cooperation of thousands of individually skilled workers can only be (or even is best) coordinated by market mechanisms is empirically false. The world economy is dominated
by corporations each employing tens of thousands of specialized workers. Do these corporations use market mechanisms internally to coordinate production? On the contrary, internally they use other forms and only externally do they lobby for the market model, forcing their competition to deal with its inadequacies. The idea that decentralized non-market mechanisms cannot produce large scale cooperation is similarly false. Witness, for example, the large scale irrigation systems maintained for centuries in east Africa. For the more modern inclinations, observe the availability of high quality free software (I've certainly never been paid for my Linux kernel code). The reality is that large scale endeavors have occurred using the whole range of human economic mechanisms, and that there is no reason, theoretical or empirical, to believe that market forces alone will lead to a desirable outcome, let alone the best one.
I read Leonard Read's "I...Pencil", and I recommend everyone here do likewise, since it's short and charming. Read expresses wonder at the range of people who unknowingly interact to produce everyday objects and persuasively claims that in fact no one knows how to make even a pencil, and concludes that it's foolhardy to impose rigid economic plans. You will note, however, that nothing he says actually supports the idea of an institutionalized "free" market (though he probably thinks they do). To the contrary, if even the production of a pencil involves subtle and unplannable human coordination, isn't it no less foolhardy to impose
a violent "free" market ideology than to impose, say, a Stalinist command
economy (which, by the way, also made pencils)?
I think that market mechanisms' main strength is that they work when other mechanisms fail. In particular they are well suited to exploiting alienated labor. To the extent our society needs alienated labor, we might want a market. But this is perhaps a necessary evil. The more often I read the question and comments, the more I begin to read it as:
"How, without a market or state, will we force people to do work they don't like, to build parts for machines they don't understand, to be used to kill people they don't know, for a cause they don't care about?". Exactly.
