We know markets are wrong.
We just think they work.

…or, why would anybody do anything if there were nothing to be gained by it?

Most people deep down think Benjamin Franklin was right when he wrote:

Finally, there seem to be but three Ways for a Nation to acquire Wealth. The first is by War as the Romans did in plundering their conquered Neighbours. This is Robbery. The second by Commerce which is generally Cheating. The third by Agriculture the only honest Way; wherein Man receives a real Increase of the Seed thrown into the Ground, in a kind of continual Miracle wrought by the Hand of God in his Favour, as a Reward for his innocent Life, and virtuous Industry.

[Positions to be Examined, April 4, 1769]

Most people also think commerce works, even if it’s “cheating”. Profit creates incentives, which make people behave in pro-social ways (trying to meet one another’s needs).

Franklin was wrong about commerce being “generally cheating”, but the belief goes back to our ancestors. Evolutionary psychology gives us the zero-sum idea that trade can’t be mutually beneficial. Ideas of “just price”, “true value”, the labor theory of value, profit-seeking as a base motive – all come from there. Per Claude.ai:

Confucian China placed merchants at the bottom of the four occupations (士農工商 — scholar, farmer, artisan, merchant) for two millennia. Tokugawa Japan inherited this and made it formal social policy: merchants couldn’t own land, couldn’t carry swords, couldn’t wear silk. Hindu varna placed Vaishyas (merchants) below Brahmins and Kshatriyas; Manusmriti has detailed strictures on commercial conduct that frame profit as morally suspect. Islamic jurisprudence prohibited riba (interest) and developed elaborate doctrines distinguishing legitimate trade from exploitation. Medieval Christianity condemned usury and developed just-price theory. Pre-contact African societies, pre-Columbian Mesoamerica, Polynesian chiefdoms — gift exchange and reciprocity are honored while market exchange with strangers is suspect or actively low-status.

Franklin was a businessman with a famous reputation for honesty, and should have known better from experience. Perhaps he felt guilt about engaging in base commerce.

It’s blindingly obvious that most trade can’t be cheating. People trade when both think they have something to gain from the trade – if trade is at “equal value” to each side, there’s no reason to bother with the trade. People value the same things differently – an employee values his earnings more than the leisure forgone; the employer values the labor more than the wages paid. I buy beans at the grocery store when I want the beans more than I want the price the store charges.

We trade when we expect to get more utility out of our holdings after the trade.

The economist Étienne Bonnot de Condillac may have been the first to formalize this:

“It is not true that on an exchange of commodities we give value for value. On the contrary, each of the two contracting parties in every case, gives a less for a greater value. … If we really exchanged equal values, neither party could make a profit. And yet, they both gain, or ought to gain.”

[Le Commerce et le Gouvernement Considérés Relativement l’un à l’autre (1776), Part I, Chapter 6, published the same year as Wealth of Nations. Marx quotes and attacks it explicitly in Capital Vol. I — he had to, because it’s a direct refutation of his labor-equivalence-in-exchange premise.]