Market Economics

There are certain items you need to create and have a productive market economy. Things like freedom, knowledge, self-interest, and competition, are what are essential. Throughout this essay I will explain in depth what these items mean and how they affect Market Economics.

Decisions in Economics are based on self-interest. This is the idea of making a decision or doing something so that it works in your favor. In the Market Economy individuals or individual groups use this to determine how much of an item they need to produce. It’s the same idea as when you go to look for a job, you look for the job that offers the best benefits and wages. Plus people will work harder if they are working to earn something for themselves rather then if they were doing it to receive nothing. Another important idea comes into play here, and that is the one of knowledge. Without knowledge on what consumers want then how would producers be able to be produce successfully. The only true way to achieve this knowledge is through careful observation of consumers. (Lemon10) Freedom is a necessity in the Economic Market, the ability to move from place to place when needed. For instance if an area is lacking jobs and there are many people, the people need to be able to move to another place. Otherwise the employer has the power to lower wages because he/she knows someone is waiting there who is willing to work for a lower wage. Without this freedom people would be stuck playing this game and no one would succeed besides the ones already in power. Basically for achievement in goods and labors people need the freedom to decide what is really wanted and needed. (Lemon11)

To have the Market Economy work you need the common effort of many peoples, each plays a small piece in the puzzle to make it complete. (?) Take a book for example it takes so many people and machines just to create one single book. Start with the planted of the seeds. After the tree grows to its potential a lumberjack will come and cut it down. When cut down it needs to be taken by some sort of vehicle to a place where they shred it into smaller pieces. I’m sure it’s someone job to unload the trees into or onto the shredding machine. Then the shredding machine does its job. Once the tree is shredded, someone has to take the shredded trees to another machine. They put it on a continuous roll, and the rotary action of the machine causes the fibers to be aligned in one direction. Then they have to repeat this process a number of times to make more pieces. Then take the pieces of paper to a printing press where they can apply the words of ink to the paper. Someone has to take the information they got to the printing press. Again the papers have to be moved to another place where the book can be put together and made ready for distribution. That’s 12 jobs and that’s not even including the efforts of getting the information for the book. Our society wouldn’t be able to produce one piece of paper unless everyone does his or her job effectively and cooperatively. (?)

The only way that the market economy stays balanced is through self-interest and competition. To provide the goods and services that a unified body of people want and need is through self-interest. A community will pay people to get goods and services, and people will do that because of their self-interest. Self-interest can also be a problem when it makes people greedy and selfish. Like a producer charging extreme prices which is nowhere near the cost of its production. Another producer will come along and charge less for the same item so consumers will go to him. So the first producer will be forced to lower its prices to meet the price of its competitor. This is the idea of competition. (Heilbroner55)

In the end once you break it all down, you see that freedom, knowledge, self-interest, and competition are without a doubt the foundation to the economic market. It cannot be just one or two of these for