The powerful concept of supply and demand in economic history

The second article is herethe third is hereand the final article is here. The theory of supply and demand is recognized almost universally as the first step toward understanding how market prices are determined and the way in which these prices help shape production and consumption decisions-the decisions that make up not only the skeleton, but also the flesh and blood of the economic system. Austrian economics thoroughly agrees with this.

The powerful concept of supply and demand in economic history

Models for Success Broad-based Economy Fiscally Responsible Compassion In all parts of the world, and in all eras of history, economic policies based on greed have failed to generate prosperity.

While public policy should not compel individual moral beliefs or practices, and economic policy should not be used to enforce personal ethics, such policy perhaps should at least be consistent with values such as compassion which, like the justifications for public policy themselves, are based on the manner in which we interact with others.

An economic system consistent with compassionate policies would: To whatever extent possible, these goals should be achieved with a minimum of government intrusion into the personal lives or private economic decisions of individuals.

They should rely primarily on positive market forces and incentives to attract compliance, but use reasonable regulatory controls when needed. Models for Success Broad-based Economy Fiscally Responsible Compassion The Failure of Extremism Policies rooted in ideological extremes have always failed to deliver economic betterment for all participants.

Americans are fed up with partisan bickering. They perceive Republicans as helping the rich get richer and Democrats as wasting money on social experiments.

On a global level, people reject extremes Communism as well as pure, unregulated capitalism. In the early 's we witnessed the collapse of Communism while, at the same time, un-regulated market economies also failed the test of compassion.

While Eastern Europe was throwing off the yoke of Communist domination, and the Soviet empire was dismantled, nations with inadequate protections for workers and consumers in the name of free markets found themselves mired in economic failure, and trying to cope with problems of crime, poverty, homelessness and extremes in the distribution of wealth.

In the United States, during the greed-oriented decade of the 's, hostile takeovers, deregulatory strategies favoring investors and leveraged buy-outs in the private sector resulted in a collapse of major markets and financial institutions, weakening the economy.

Cutbacks in productivity and innovation caused the United States to lose ground in its technological leadership, resulting in trade deficits, budget deficits and industrial stagnation.

Health care became inaccessible to many. Home ownership, virtually taken for granted from the late 's to the mid's, became almost impossible for first-time buyers until the market collapsed under its own weight in the late 's, while paper wealth equity created a tremendous windfall for those who got in and out of the cycle at opportune times, as inflation in housing galloped at a rate far above general inflation.

Poverty, desperation, lack of educational and employment opportunities or mental health services drove increased numbers to drugs, crime and violence.

While the middle class shrank and poverty became more widespread, wealth was increasingly concentrated in the hands of a few who benefited greatly -- with the result that sales of luxury cars, multi-million dollar homes, expensive artwork and costly electronic toys increased dramatically [Kevin Phillips, The Politics of Rich and Poor, Random House,].

In third world countries, feudal economies with virtually no industrial regulation resulted in a concentration of most productive resources in the hands of a very small wealthy class while masses of the poor live in urban squalor or in impoverished rural villages.

The gap between rich and poor is carried to its farthest extreme. There are success stories: Despite their own ups and downs, Germany and Japan have recovered from the physical, spiritual and economic devastation of to become economic superpowers.

The Scandinavian countries are doing quite well.

Supply and demand - Wikipedia

Singapore and Taiwan are still prospering even though, like Japan, they lack adequate land and natural resources. Japan and Germany are free-market economies, right?

But in both Japan and Germany, industry responds to market demands, yet works closely with government to manage resources and influence distribution of wealth, largely due to social traditions along with regulatory systems imposed on them by Western occupying forces following World War II.

American history also offers a successful economic model. In the 's, despite rich natural and land resources, we suffered from the economic devastation of unrestrained free-market policies. But the New Deal, a basic free-market system with moderate regulatory protections for workers, consumers and investors, set in motion an unprecedented economic recovery and prosperity that continued for the next four decades.

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Why did we retreat from this successful model? By the 's, the regulatory controls designed to protect us from the extremes had themselves become excessive. Ridiculous examples of bureaucratic waste, inefficiency and outright corruption became commonplace.

There were many demands for bureaucratic reform and reduction in the size and scope of government influence. It became necessary to identify and correct legitimate examples of government excess, institute safeguards against future abuse and adapt programs and policies to meet changing needs. What we got instead was an attempt to completely dismantle all the regulatory protections that had created this prosperity and kept it going for so long.

Recession, reduced productivity, and a widening gap between rich and poor are the consequences. Does this contradict the all-American values of individual responsibility and self reliance?Statistical Process Control.

When All Else Fails, Just Follow The Money Trails

Statistical Process Control, or SPC, is the method developed by Shewhart in It exists to monitor or regulate a process to guarantee it functions to its highest capabilities.

Georgescu-Roegen reintroduced the concept of entropy in relation to economics and energy from thermodynamics, Neoclassical economics systematized supply and demand as joint determinants of price and quantity in market equilibrium, economic epistemology and history, globalization, household economics and the care economy.

. Ricardo invented the concept of the economic model—a tightly knit logical apparatus consisting of a few strategic variables—that was While they gave impetus to the study of economic history, He was still concerned with the problem of demand and supply, but “demand” in the Keynesian model means the total level of effective demand.

A common sense discussion on the economic concept of demand. Demand - what do economists mean when they use the term demand?

The powerful concept of supply and demand in economic history

A common sense discussion on the economic concept of demand. Economics Supply & Demand Basics U.S.

Historical development of economics

Economy Employment Production Psychology Sociology Archaeology The Economics of . The global financial crisis, brewing for a while, really started to show its effects in the middle of and into Around the world stock markets have fallen, large financial institutions have collapsed or been bought out, and governments in even the wealthiest nations have had to come up with rescue packages to bail out their financial systems.

The supply and demand mechanism (the economic model) besides being the natural consequences of economic forces provides the most efficient economic outcomes possible.

In the grain markets the variations in supply due to weather conditions has a long history of affecting price and the supply curve.

What Is the Concept of Demand and Supply? |