Watch now | Welcome to Economics 101, a new series designed to distil the fundamental principles of economics into clear, easy-to-understand explanations.
Whoever first said, “you can’t buck the market” was absolutely correct.
The free market will always set the price. But, as you describe, there are differing factors that affect the price or the acceptance of the price, such as need!
But in assessment of ‘the market’ or its ‘failure’ must first be judged with the availability of money. Free money. Free of debt that is. Rather than indebted money.
The one part of this whole equation. Money supply, is always forgotten. The market is always referred to without looking first at money supply.
Without money and without that money being SPENT there can be no free market. No production and no sales or ‘exchange’ of work. Not in a modern day economy.
MS=R. Money multiplied by Spending equals Revenue.
Without first applying this equation to the market and its success or failure, no assessment can be made.
It’s putting ‘the cart before the horse’.
Stephen, unless there is of likely to be a free ready supply of money being SPENT that connect the production of goods or services then a market can’t exist.
If you produce goods that can’t be sold, then that’s failure 101. No matter what market is presented, without first applying an available pot of money to the customers then no business or market can be assessed.
This fact is never discussed. And its absence in conversation goes yo the heart of our understanding of market failure.
Governments have, ‘skin in the game’. They need revenue in tax taken from our revenue. So without us first earning revenue, from money being freely SPENT, no SPENDING can take place. Nor can sufficient tax revenue be gained. So, without first calculating the money required and for it to be available ready to SPEND there can be no true assessment of a failed or successful market. The two are symbiotic. One side of the same coin! Yo asses the coin you have to look at both sides of the coin and equation.
And here lies the problem Richard.
Economists only look at one side. So inevitably they come up with wrong and conflicting outcomes.
Just like it is to find the cause and to correct the failure. You must first def the whole picture to diagnose the illness and to come up with the correct prognosis.
All money has to move fast. By way of free SPENDING. Customers need the ready supply of money that action gives. The reaction is then the markets action or inaction. The markets success or failure with the money supply fixed first. Otherwise it’s a compound if an error. It will always be an error.
Stephen, a very informative piece.
Whoever first said, “you can’t buck the market” was absolutely correct.
The free market will always set the price. But, as you describe, there are differing factors that affect the price or the acceptance of the price, such as need!
But in assessment of ‘the market’ or its ‘failure’ must first be judged with the availability of money. Free money. Free of debt that is. Rather than indebted money.
The one part of this whole equation. Money supply, is always forgotten. The market is always referred to without looking first at money supply.
Without money and without that money being SPENT there can be no free market. No production and no sales or ‘exchange’ of work. Not in a modern day economy.
MS=R. Money multiplied by Spending equals Revenue.
Without first applying this equation to the market and its success or failure, no assessment can be made.
It’s putting ‘the cart before the horse’.
Stephen, unless there is of likely to be a free ready supply of money being SPENT that connect the production of goods or services then a market can’t exist.
If you produce goods that can’t be sold, then that’s failure 101. No matter what market is presented, without first applying an available pot of money to the customers then no business or market can be assessed.
This fact is never discussed. And its absence in conversation goes yo the heart of our understanding of market failure.
Governments have, ‘skin in the game’. They need revenue in tax taken from our revenue. So without us first earning revenue, from money being freely SPENT, no SPENDING can take place. Nor can sufficient tax revenue be gained. So, without first calculating the money required and for it to be available ready to SPEND there can be no true assessment of a failed or successful market. The two are symbiotic. One side of the same coin! Yo asses the coin you have to look at both sides of the coin and equation.
And here lies the problem Richard.
Economists only look at one side. So inevitably they come up with wrong and conflicting outcomes.
Just like it is to find the cause and to correct the failure. You must first def the whole picture to diagnose the illness and to come up with the correct prognosis.
All money has to move fast. By way of free SPENDING. Customers need the ready supply of money that action gives. The reaction is then the markets action or inaction. The markets success or failure with the money supply fixed first. Otherwise it’s a compound if an error. It will always be an error.