What is Economics?
Understanding the Economic Market
The economy can be a very complex topic and can be difficult to understand. In Bylund’s writings, he aims to give a fundamental understanding of the economy and market as a whole. He refers to the economy as an “unplanned order” and explains that there are laws and rules to the market that people must follow. I personally have struggled with understanding the ways the economic market functions before and Bylund’s work helped me understand in a simple yet intricate way. There are many different kinds of economic markets that we interact with in our daily lives and the point of economics is to be able to understand and function within these markets. The economy is people making decisions, acting, and exchanging goods or services to others who seek them for currency in which both parties feel satisfied and come to an agreement on the transaction.
Our means are limited but our wants are not. We must figure out how to make as much as possible with the little we have(Bylund pg.16)
I believe this shows how the market is affected by wants and needs which also affects the price of items in the marketplace depending on the quantity of items being produced. Bylund explains that the economy is more of a living creature rather than a machine. It relies on people interacting with other people to create a mutual benefit and using means to get to an end. The economic market consists of a series of choices made by the individuals interacting within it. Bylund uses this point to show the validity of the market and that not everything is a fixed or pre determined solution.
You can use your money to buy one thing, or to buy another. Or you can save your money for another time. But the same money cannot be used both to buy something and be saved too. Your choice of one thing means you did not and cannot choose the other.(Bylund pg.16)
This action is called economizing and it plays a very important role in the market and has a great effect on those involved. to understand the market you must also understand wealth and how to interpret and obtain it. Knowing how much things are worth and the leverage they have can help you determine if you want to produce certain things or not and what will give you the best margin of cost and revenue when it comes to production and selling different items.
Problems Within the Economy
Production is one of the main problems in the economy, Bylund says that there is no direct relationship between input and output. While inputs are needed to create outputs, it is the value of the output that is the concern. My interpretation of it is that while you might have the resources to create a product, you do not want to put effort and money into creating something that will end up having no value in the economic space. He uses Van Gogh as an example when he says
If I produce a painting, the expected result would be of little value regardless of my effort or how much paint I use. The same canvas and paint used by Vincent van Gogh would create something of much higher value. By placing his signature on my painting it would increase my painting’s value. But my signature on his painting would decrease its value.(Bylund pg.18)
The amount of time it takes him to make that painting might not be worth the money he will get out of it. It is difficult in the market to make a choice, like my point earlier in the passage, to decide on what product to use your resources on to guarantee a benefit or profit.
Behind the Scenes
There is much more to the economic market than just buying an item off of a shelf. There is an extensive process in the making of the product and then being able to produce and supply it to the stores that can sell it to the consumer. The market is an extremely complex system that Bylund was able to explain very simply and thoroughly.
The point is that the elaborate, complex production process that produces any good you see in the store is not the design of anyone in particular.(Bylund pg.44)
This quote shows the complexity of the market and that nothing is produced by just a single person. It takes multiple different companies to come together to create, distribute, and sell items in the marketplace. It is a very intricate network of processes that have to work together to have success in the market. There is also competition other than commercials and advertisements between companies that exist. Behind the scenes, businesses have to compete with businesses that have not been created yet. The more businesses that exist in a single portion of the market, the more the consumer base will be spread out amongst them. Innovation is also a key component in creating a better economic market and making advancements that will benefit society or can make the costs of production decrease to make the item more affordable which will benefit everyone in the economy. After all, the economy exists and grows with people making transactions with others to come to a mutual understanding and agreement for the betterment of themselves and the economic market. Bylund does an excellent job of explaining and informing the reader of the full structure of the economic environment while being simplistic in ways that are easy to understand and help the audience learn and obtain knowledge they might not have had.