#Unbeatable, Imperfect Markets with P.L. Bylund
"What he suggests is that production evolves as new and better ways of producing are introduced into market and ultimately replace the older, and from the point of view of the consumers, less efficient form. This includes business firms come and going, entrepreneurs disrupting the market, and with these"revolutionizing" events come changes to the very structure and extent of the market." (Bylund, 2016, p. 51)
In the economics of Capitalism creative destruction is always a common topic when discussing the evolutions of the market, but I would argue it's more about the adaptability of the said business in question. Most of the major people in markets usually are equip to adapt to the new ideas of the market quicker than other new companied trying to enter because they sell the substitute item. When businesses lose their ability to adapt is when they fail which can come from division of labor and specialization. Horses and buggies lost their ability to adapt when cars could go faster. Unless it is something like that every company has the chance to adapt. If you want to be a cab driver now join Uber, it didn't destroy the cab business rather shifted the market. With an ever changing market the business man must be ever changing with it or he will lose. I'm sure a lot of those same cabs were used for Uber or until they went out. My point is if a cab driver wanted to continue they had to join Uber or drop their prices to Uber. That's doing so much good because that is the ultimate competition. Who has the best ability to adapt to the ever changing need and wants of the consumer, and who can best predict the future of those needs/wants. "What holds this economic organism together is exchange." (Bylund, 2016, p. 64) I like this because exchange is the lifeblood of the economy. Exchange is really the driving force for any economy because that is what the economy is mad for is to serve our wants and needs. Exchange is the non biased mechanism that drives our economy by pumping resources into the most sought for items created by entrepreneurs.
"It is hardly necessary to point out that competition of the kind we now have in mind acts not only when in being but also when it is merely an ever-present threat. It disciplines before it attacks." (Schumpeter, 1962, p. 85)
I agree with Schumpeter here. Competition now a days makes you stay on your toes and keep up because if you don't you will be replaced by which he means disciplining you before it attacks. The competition is always there and if you aren't trying to think, "how can I improve my systems and processes?, then you are drastically behind and you become the destruction side of creative destruction because you lost your creativity that got you there in the first place. I think it is an exciting system because it seems that there is always a way to improve what your doing and with our economy today resources are easier to access and selling on the internet has never been easier. So as long as you can make yourself adaptable and always thinking of ways to stay creative then you will have a better chance of being successful because it always takes some luck.
"Capitalism, then, is by nature a form or method of economic change and not only never is but never can be stationary." (Schumpeter, 1962, p. 82)
Great point by Schumpeter here to incapsulate the economy and how it is always changing and processes are always being improved and someone is always out there trying to find a better product to replace another product in our economy. I think there are companies now that have essentially became chameleons within the business world like apple and amazon for example will always be able to go into whatever market they want which just makes them bulls in the marker, however there will always be niches that those big companies miss because they are always focused on volume I feel like. The best companies are the ones that make a whole niche out of their products like apple, they have all their own things. You can get a different phone, but you would lose all the software and the things you are so accustomed to and that's how they keep you using their product.
Since I have started landscaping I have seen guys that just do strictly mowing, landscaping, spraying, and more often than not it seems that they seem to be more successful and stay in business longer than a company who doesn't specialize and choose a specific niche. Although, all business started out have a high failure rate within five years. > "What he suggests is that production evolves as new and better ways of producing are introduced into market and ultimately replace the older, and from the point of view of the consumers, less efficient form. This includes business firms come and going, entrepreneurs disrupting the market, and with these"revolutionizing" events come changes to the very structure and extent of the market." (Bylund, 2016, p. 51)
"As the purpose of entrepreneurs' undertakings is their own consumption, however indirectly through production that satisfies others' consumption, they are involved in contributing to the public good of value creation." (Bylund, 2016, p. 67)
Bylund described the bidding of Entrepreneurs role in the economy by serving their product at the same time they are distributing all their wealth creation through the economy thus driving it farther. It's just the acquiring and distributing of wealth through the products that the entrepreneur buys. A mindful entrepreneur understands the driving force the acquisition of wealth can be and hopefully he/she uses it to drive good innovations that are good for the whole world and sustainable because if some bad things start trending now it could really affect the environment and do much more damage when information passing wasn't so available.
Sources:
- Bylund, P. L. (2016). Chapter 4: Unbeatable, Imperfect Markets. In Seen, the unseen, and the unrealized: How regulations affect our everyday lives (pp. 47–72). essay, Lexington Books.
2)Schumpeter, J. A. (1962). Chapter VII: The Process of Creative Destruction. In Capitalism, socialism and democracy (pp. 81–86). essay, Harper Torchbooks, Harper & Row.
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