When we think about the market, without much thought, we may think of the stock market or inflation or recession or maybe even the supermarket. Overall, the market, from a student perspective or simple words, can mean exchange or trade of goods and services. Also, when we hear about the market we can relate this term to the economy in terms money, finances, selling and production. These terms are interchangeable and similar in the ways of society and in correlation with providing products and/or services for our wants and needs as humans.
The Market
In first talking about the market and understanding what the market is and it's definition, we can ask ourselves, what all is entailed in the market and how does it work. In chapter one of “The Seen, The Unseen, and the Unrealized,” by Per L. Bylund, we are asked as the reader, does the market work? In this text we can take a further look into the correlation of the economy and the market, the entrepreneurial side of the market as well as seeing if the market works according to the author. According to Bylund in chapter one, “The How of the Market,” he states that asking the question, “does the market work?” is synonymous to asking, “does the economy work?” In the text he says,
“…both questions above refer to the same thing: the economic system or organism. The difference is that “the market,” while often misunderstood, may refer to the economic forces unbridled and unhampered that is the economy without regulation. The term economy, in contrast, seems to refer to the regulated and taxed economy as were used to in our everyday lives, that is the market plus boundaries and restrictions set through political means” (Bylund, 2016, p. 2).
The market is sometimes considered dysfunctional, uncontrolled, and even unmanaged in that it can bring about conflict in economic areas, is always changing and is often misunderstood as Bylund says in his book. We can almost say that the market is almost ungovernable until the economy gets involved. When talking about the economy, there are some controllable aspects that can occur from certain political parties. As Bylund said in chapter one, the economy is more restricted and more controlled in terms of boundaries set by politics and as one of the people, I could not agree more. We then can interrelate these two terms and talk about entrepreneurship and entrepreneurs. Entrepreneurs are the people who operate businesses and oftentimes see potential in the market. According to Bylund,
“such entrepreneurship is the driving force of the market, and profit is the economic driving force of the entrepreneur” (Bylund, 2016, p. 6).
Entrepreneurs often have a drive that allows them to take risks in certain business opportunities and decisions and essentially create their own market. These market decisions then can influence other aspects such as pricing, value, and other economic aspects.
Now, with all this being said, we can circle back to the previous question, “does the market work?” and in a short answer, it depends. According to Bylund, he mentions that the answer to this question is up for interpretation as it depends on the context of when this question is asked. I would agree that the market does work in terms of an entrepreneurial standpoint in that they can influence the market from their decisions and production as they introduce product and services, they believe will work to the market itself.
The Economy
In reading chapter one of “How to Think about the Economy,” by Per L. Bylund, he states that the
“Core to understanding the economy is recognizing that it is about human actions and interactions. In fact, the economy is people acting and interacting. It is little or nothing else” (Bylund, 2022, p. 15).
In reading this quote, we can infer that economics is not based solely on money or little to no financial reasoning but more so on decision and interactive principles from people. We can see this and relate this to Bylund’s book, “The Seen, The Unseen, and the Unrealized,” in chapter one when he talks about entrepreneurs influencing the market as well as influencing the economy as well. Entrepreneurs are interactive people who are set to create product and/or services to support consumers needs and wants. Once the production begins on these products and services, they are then introduced into the market, then this is when economics comes into play.
We can also see that Bylund makes the argument that placing value on economizing production is a problem in the economy and is the basis of chapter one itself. In this chapter he says,
“It is about the issue that arises because we do not have more resources than we find uses for. In other words, resources are scarce. So it is incumbent upon us to figure out how our resources can be used to produce the best possible outcome (in value terms)” (Bylund, 2022, p. 18).
We oftentimes put a lot of value on our possessions sometimes more than anything else and in doing this, it can oftentimes create conflict and issues due to placing so much desirability on these items. As humans, we desire to do what we can to meet our needs and wants but the resources to do that are scarce, as Bylund mentioned, and in return can create more problems than we want.
Economic Theory
In chapter two, “Economic Theory,” of Bylund’s literature, “How to Think about the Economy,” he talks about economic theory and how human action is used to explain the starting point of how the economy works. In the reading he says,
“Economics is based in the concept of human action as purposeful behavior. What this means is that when people act, they try to achieve something. It does not mean that they are always accurate or do the “right thing” (whatever that is). But it means the reason they try to achieve it is that they value the expected outcome in some way” (Bylund, 2022, p. 22).
For example, acting upon decisions or ideas that are important to you or you see value in, is essentially an important step to create economic relevance too said decisions and ideas. In Bylund’s book, “The Seen, The Unseen, and the Unrealized,” he talks about the entrepreneurial market aspect and with that we can use this as an example. In this chapter, when talking about entrepreneurs and businesspeople alike, they essentially have the “freedom” to create their business and market for something they value but this “something” can only come to life if they act upon it. If not, their ideas and decisions will have no impact or difference towards their desired outcomes. So, to understand the economy and implement or bring about an idea or decision, one must act on it and in return will better help grasp a better understanding of the economy.
A Process, Not a Factory
In chapter four, “A Process, Not a Factory, of Bylund’s literature, “How to Think about the Economy,” he states that
“…to understand everything we see around us, including everything that we take for granted, we must recognize that the economy is not a state but a process” (Bylund, 2022, p. 41-42).
We must examine and further pay attention to the production and processes of a good or service rather than looking at the economy in an overall picture. In doing this can prevent outcomes of inefficiency and wrongful assumptions. Bylund has mentioned previously in chapter two of this same literature, that it takes action to recognize and create economic relevance as well as help influence your own desires and values. To even consider action on these desires or values, we must first trust the process in how something is made or brought about.
In Bylund’s book, “The Seen, The Unseen, and the Unrealized,” we read that entrepreneurs are aware of the risks and decisions they make when it comes to taking business ventures. They essentially look into a lot of aspects that better their market but also better their economic ventures or in other words look into the processes of consumers desires and values. In turn, adding value onto the wants and needs of consumers increases desire and willingness to pay higher prices. According to Bylund he says,
“That payment is what justifies the businesses’ investments and expenses throughout the economy. Consequently, what indirectly coordinates what all businesses do—and how they do it—is their expectation that they are contributing to providing consumers with valued goods (Bylund, 2022, p. 45).
But to understand how to add value to these wants and needs, it would be beneficial to further grasp the processing concept of how the items were made, who created them, why they were created, etc. It is all about the process, not a factory.
Conclusion
The market and economy are different in definition but he same in concept in terms of societal functionality. They both are interrelated to benefit us as humans and consumers to satisfy our wants, needs and desires. We can look into the entrepreneurial aspect in the creation and implementation of creating our wants, needs and desires as they are making business venture decisions that some consider riskier and more dangerous. To dive deeper into these ventures, the entrepreneur must first consider and focus more intently on the process of production of said creations and how the process contributes to the value of consumers desires, needs, and wants. Overall, Bylund’s perspective of the market and the economy closely relates to my own perspective and thoughts as well.
References
Bylund, P. L. (2016). Chapter 1: The How of the Market. In Seen, the unseen, and the unrealized: How regulations affect our everyday lives (pp. 1–14). essay, Lexington Books.
Bylund, P. L. (2022). Chapter 1: What Economics Is. In How to Think About the Economy: A Primer (pp. 15–20). essay, Mises Institute.
Bylund, P. L. (2022). Chapter 2: Economic Theory. In How to Think About the Economy: A Primer (pp. 21–26). essay, Mises Institute.
Bylund, P. L. (2022). Chapter 4: A Process, Not a Factory. In How to Think About the Economy: A Primer (pp. 41–50). essay, Mises Institute.