Adaptable Entrepreneurs
One of the primary characteristics of being an entrepreneur is being able to adapt to all of the changes that occur in the economic markets. This is a very important attribute as the markets are ever changing, partly due to consumers' wants constantly evolving. Entrepreneurs must pay attention to the wants of the consumers so that they can know what product and how much to produce to be able to engage in the market to provide a mutual benefit. This is why entrepreneurs make sure to pay close attention to the market and consumers to help them be able to try to predict the future trends and wants so they can prepare to meet the upcoming needs. Bylund does a great job in explaining this by using Frederic Bastiat's "broken window fallacy" interpretation of ripple effects and how certain actions of the market can affect future transactions. This helps make his point very clear which is why economists still reference him to this day to help people better understand the market.
Government Regulations and Taxes
Of course, the average entrepreneur or business owner can only predict the temporary changes in the market. There are long run changes that also affect the market, and those are government regulations and taxes. The purpose of these regulations is to eliminate or restrict the productions of certain goods, which forces some businesses production to shift to a different type of good. Regulations can also be ineffective which means that it has little to no real effect on the market. In order to be effective, regulations must influence or change the means of production to cause different outcomes and activities within the market. Not all regulations effect the entire market, there are some that target one group of producers, while having no effect on another. Even if the regulations apply to a certain group or individual, if the law is not enforceable or impossible to measure, then that would also be an ineffective regulation. If an institution within the market or society is much larger than all of the others and the area is highly dependent on them, they are more likely to get away with not abiding by the regulations. This is because the laws were put into place by officials, and those officials are more than likely also reliant on the success of the large corporation. This shows that government forces and officials play a heavy role in regulations made to limit the production of certain goods within the market. It is important for the authorities and citizens to have trust with each other or else it would be hard to have the population follow the laws. If they do not have a good relationship then the population will be hesitant to abide by the law and the government can not trust them to. The government can also place subsidies which ease the restrictions that were currently in place. They can also place higher or lower taxes on certain activities if they want to influence society to use one option over another. These regulations also have an impact on the supply and demand of certain items. If production costs decrease than more goods can be supplied meaning the demand will follow. Bylund says the point of regulation is to
create incentive by making a certain type of production, or production of certain types of goods, relatively advantageous (less costly) by lowering the regulatory burden on that wanted type. (Bylund, 2016, p. 105)
Regardless if the regulation is effecive or ineffective, this is the driving factor and influence on the demand and supply of goods within the economic market. I was not aware of the impact or reasonings behind taxation and regulation in the economic market. Reading Bylund's work has expanded my understanding of what goes on behind the scenes to allow the market to grow and flow in a controlled process.
Understanding the Market as a Whole
Bylund has many great examples that explain taxation and regulations very well and makes it simple to understand. Reading his work has taught me many things about the economic market and how it works. It shows that there are many pieces and forces that determine and influence certain parts of the market. The ultimate goal for regulations is to prohibit production of certain goods and to steer companies to produce other goods. It also influences the society too, placing higher taxes on certain goods or activities convinced them to do one rather than the other. Regulations do not intend to stop exchange and growth, rather guiding it in a direction that can benefit both parties in a controlled manner. I always held my focus on what businesses did but never thought about the reasoning behind them doing it besides it benefitting or hurting themselves rather than the government trying to regulate the market.
Source
BYLUND, Per. L. (2016). Chapter 7. In Seen, the unseen, and the unrealized: How regulations affect our everyday lives. essay, LEXINGTON Books.
I agree with you that Bylund does a great job in explaining that the market is always changing. I also enjoyed the "broken window fallacy" reference. Like you mentioned, the wants and needs of consumers change daily. Entrepreneurs must be prepared to hop on new trends and even anticipate what consumers will want next.
It's interesting that the government officials can put new policies and regulations in place, but they may not be followed. Sometimes big corporations and large populations can get away with more not abiding by them. If a large amount of people do not follow the rules the government lays out, it's harder for any consequences to be had. Unless each business is checked individually by an official, they are able to not report things that would be against regulation.
This is very interesting to think about. It reminds me of being a rebellious teenager in a way. If you tell a teenager to do something, most of the time, they will do the exact opposite. When my parents tried to tell me to not go somewhere or do something, it made me want to do it more. Or if they told me to do the dishes when I was already going to do them, I no longer wanted to do them. The same goes for the general population. The more rules and regulations that are put in place, the more they won't follow them. Most people do not like to be told what to do.
I think that regulations could definitely be used a guide. However, sometimes people just get power hungry and they like to tell businesses how they should be run. This has happened for centuries and it a big factor in why the population does not trust or have a good relationship with the government. It is hard to find a healthy balance in guiding people and controlling them. But, if the government wants their policies to be followed they must strive to give direction in a better way than they are right now. If the population does not trust or respect the people running our country it will turn our world upside down.
I like how you started out with the main attribute an entrepreneur needs to have and that's adaptability because without that even a really good idea will fall behind fro innovation from his original idea.
Couldn't agree with you more. Even with the latter part because that is a big reason and people just want improvement as time goes on with existing products too. That is a good thing about our economy is all the competition makes people stay honest and always be trying to improve and do things better because that is what the competition is doing to try and get the job you're doing. I like how the market is always so open to change if it works and the product or service is good. Good business is universal and people really appreciate it at the end of the day no matter what service or good you are providing. I also agree it's much easier to predict short term economy than long term economy impact. We don't know when corona 2.0 is going to hit. I don't think they will ever shut the economy down again because it was so detrimental when they did it during covid. I think in the future the US will take much more open approaches to diseases, but it also depends on how bad it is of course too. I think regulation should be used on nonrenewable resources of course and more of an importance put upon trying to find better supplemental products, but creative destruction is not always a fast process because sometimes it takes things like mass deforestation and literally running out of supplies before we try to go away from a substance for building houses other than our trees, but just like the laws within our system it takes time for people to realize a problem because you don't notice the repercussions of what you're doing in the beginning. Those come years later when much more damage has been done and its an apparent problem. Not everything can be perfect though and that's just how we must learn sometimes, but we must also be open to change.