Lost amongst the political and economic analysis of the day are some fundamental truths that, whilst being ignored, are never going away and without proper acknowledgement will cause governments everywhere to continue to cause a distorted, hampered and inefficient economy. First, we need to define what the economy is, what the market is since we can’t very well acknowledge distortions in the market economy if we haven’t even defined what that is. The market economy is a system that allows for and is made up of all exchanges that are considered, by those who take part in said exchanges, legitimate. On a simple level, this exchange involves two individuals trading one thing that they value less for something they value more, if I put that into a realistic example, exchange is trading £1.50 for a loaf of Hovis bread. If this is done without coercion, that meaning without the threat of violence and voluntarily, then it is objectively true that both individuals are better off (value has been created) since if either individual thought they would be made worse off from the exchange then they would not have made the exchange. This all comes from the fundamental truth that value is subjective, 100 different people can value the same item differently allowing for this exchange that makes people better off. It follows from this that any intervention into this simple yet highly influential exchange distorts this value creation and leads to worse outcomes for everyone involved. Since this is only an article and we need not understand the deeper mechanics of the market economy to fully address my point, I will not delve deeper into the mechanics of the market economy but I encourage people to read “The Seen, The Unseen and The Unrealized” by Per Bylund to strengthen your own foundation of knowledge and truly understand how much government affects you.
How we should attempt to understand the Economy
How we should attempt to understand the…
How we should attempt to understand the Economy
Lost amongst the political and economic analysis of the day are some fundamental truths that, whilst being ignored, are never going away and without proper acknowledgement will cause governments everywhere to continue to cause a distorted, hampered and inefficient economy. First, we need to define what the economy is, what the market is since we can’t very well acknowledge distortions in the market economy if we haven’t even defined what that is. The market economy is a system that allows for and is made up of all exchanges that are considered, by those who take part in said exchanges, legitimate. On a simple level, this exchange involves two individuals trading one thing that they value less for something they value more, if I put that into a realistic example, exchange is trading £1.50 for a loaf of Hovis bread. If this is done without coercion, that meaning without the threat of violence and voluntarily, then it is objectively true that both individuals are better off (value has been created) since if either individual thought they would be made worse off from the exchange then they would not have made the exchange. This all comes from the fundamental truth that value is subjective, 100 different people can value the same item differently allowing for this exchange that makes people better off. It follows from this that any intervention into this simple yet highly influential exchange distorts this value creation and leads to worse outcomes for everyone involved. Since this is only an article and we need not understand the deeper mechanics of the market economy to fully address my point, I will not delve deeper into the mechanics of the market economy but I encourage people to read “The Seen, The Unseen and The Unrealized” by Per Bylund to strengthen your own foundation of knowledge and truly understand how much government affects you.