The Market and Economy
In society today, the market and economics are defined in similar ways based on the individuals in our communities, production capabilities, and the selling of goods and services. Both the market and economy change as society evolves and they shape themselves to meet our needs.
The Market
In Chapter one of, “The How of The Market”, Bylund discusses the roles which allow the market to function. His main point is that entrepreneurs can create their own marketplace because they participate in an exchange of products or services allowing them to create something quickly that will benefit individuals based on what is happening in society. Bylund mentions (Bylund, 2016, p. 7) that entrepreneurs also influence the prices of production and the value of the products being sold. Which then raises the cost of living in our society. It is stated that,
“Entrepreneurial production is core to what comprises the economic organism...” (Bylund, 2016, p.7).
This quote expresses to us that the production from entrepreneurs has a heavy influence on our economy and society. Without entrepreneurs and their creation of products, our society would not have a constantly evolving and working market.
Additionally in Chapter one of, “The How of The Market”, Bylund asks the question,
“Does the market work” (Bylund, 2016, p. 1)?
And throughout the chapter he discusses his opinion, but he also states that it is up to the readers to answer that question and to conclude their own opinion. Personally, I agree with Bylund and the discussion throughout the chapter because it is often the entrepreneurs in our society who make see a need, develop a product, quickly bring the product to the market, and allow the economy to work. Without them, we would not have a marketplace or a variety of products and services to meet our needs. I also agree with the idea of voluntary exchange, where each party must offer something of value and not produce fraudulent items that have no use. In my opinion, this is the most important aspect of how the market is able to work so well.
The Economy
In Chapter one, “What Economics Is”, Bylund defines economics and explains the key issues we see in economics within our society today. He states,
“In fact, the economy is people acting and interacting” (Bylund, 2022, pp. 15-16)
and then goes on to say that,
“Simply put, the economy is about creating value” (Bylund, 2022, pp. 15-16).
These quotes express that the economy is not just about the money, as we like to think of it, but more about the individuals functioning in a society and the importance of entrepreneurs creating valuable things we can buy or sell. The major problem he focuses on, in this chapter, is the value placed on production. An item can have high value to one person, but no value to another. For instance, I value my phone for communication because I live four hours away from my family. But for another individual, who lives at home with their family, they may not value their phone for communication purposes. So, I agree with Bylund that placing too much emphasis on the value of items being produced is an issue because value varies based on individual needs.
In Chapter two, “Economic Theory”, Bylund further explains that the economy only works because of individuals’ taking action. Without people taking the step to purchase something they want or need, there would be no economy. As described in the first chapter, the economy is the result of people around us producing and buying items from the marketplace, which then creates our society. Bylund states,
“In other words, economics is methodologically individualist” (Bylund, 2022, p. 24).
In this quote, Bylund expresses that each individual acts on their own personal needs. Therefore, without individuals acting, the economy does not exist. I completely agree with Bylund on the fact that we would not have an economy if individuals did not act upon their wants and needs. However, I do not agree that individuals act independently. I have seen cases where groups of individuals collectively purchased a product, a business was created from the bulk purchase. If only one person decides to purchase an item, then there is not much of a business for that unique product.
In Chapter four, “A Process, Not a Factory”, Bylund describes the economy as a process and that without it nothing else around us would work. Bylund (Bylund, 2022, pp. 42-43) uses the example of a candy store. The candy company did not make the flour, sugar, food coloring, or even the machines used to produce the candy. Therefore, without the purchase of these extra products, there would be no candy. Bylund gives tons of other examples, like transportation, electricity, and plantations to show readers how there are many processes put together for our economy and world to work. It is stated that,
“What is important is not to map out all the things that are involved in making a certain good, but to understand that the economy is all of these things working together” (Bylund, 2022, p. 43).
This quote supports the idea he is expressing throughout the entire chapter, which is how our economy is several processes put together to make one or more things. Overall, our economy is constantly evolving, because there is always something new and of more value being produced. Entrepreneurs must be aware of this and understand the entire process.
Conclusion
The market and economy play a significant role in how our society is able to function and how businesses create the goods or services to fit our wants and needs. Without the entrepreneurs constantly innovating and creating new ways to improve our lifestyles, we would still be stuck in the 1800s. Overall, my opinion on how the market and economy functions and evolves, aligns almost identically with Bylund’s opinions.
Works Cited
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.
I absolutely agree with this statement. Entrepreneurs create jobs and employ people which leads to the growth of the economy. The creation of new jobs reduces the unemployment rate as well. On top of this, they can create wealth which can then be reinvested into other businesses and/or stocks. It is also common for them to donate to charities and other philanthropic events and organizations. Community development can also be a by-product of these efforts. Each of these things benefit our economy and society as a whole.
Bylund stated that
This statement can be interpreted many ways. Value can be created in many ways but specifically the benefits that goods and services provide people creates an abundance of value. Value is not just created by entrepreneurs and businesses: the government and nonprofit organizations can create value as well. Governments can improve transportation and communication networks. This makes it easier for businesses to operate and makes goods and services more accessible. Nonprofit organizations can provide support development and social services that benefit communities as well.
I agree with your statement that an item can be very valuable to one person and not to another. The other thing that must be considered by entrepreneurs is that their product or service might just simply be a trend. It may be popular one day and not the next. They also have to be very competitive. Another company could create a product that is either cheaper or works better. They will have to figure out if they can make their product for a lower cost or if they can improve how their product works.
I agree with many points that you made throughout this essay.
The essay argues that the market and economy are shaped by the individuals in society,
production capabilities, and the selling of goods and services. The author agrees with the central idea of the book, "The How of The Market" by Bylund, that entrepreneurs create their own market and influence the prices of production and the value of the products being sold. They also agree with the concept of voluntary exchange and the idea that the economy is about creating value, and not just money. However, they disagree with Bylund's assertion that individuals act independently in the economy. I concur with the author's agreement with Bylund's central idea that entrepreneurs create their own market and influence the value of the products being sold.
“His main point is that entrepreneurs can create their own marketplace because they participate in an exchange of products or services allowing them to create something quickly that will benefit individuals based on what is happening in society.”Bylund's central idea that entrepreneurs create their own market is based on the notion that entrepreneurs are able to identify unmet needs and create new products and services that cater to those needs. This allows them to enter new markets or even create entirely new ones. Furthermore, entrepreneurs can influence the value of their products by the quality of the product, the marketing strategy used, and the demand from the market. In my opinion, this perspective aligns with the current understanding of entrepreneurship and the role of entrepreneurs in the economy. Entrepreneurs often bring new ideas to the market, which can lead to increased competition and innovation, as well as improved products and services. This, in turn, can benefit consumers and drive economic growth.
However, it is important to note that creating a market or entering an existing market does not guarantee success. There are a variety of factors that can influence the success or failure of a business, such as competition, market conditions, and the availability of resources. Therefore, while entrepreneurship is an important driver of economic growth and innovation, it is not a cure for all economic problems. One potential limitation of the essay is that it does not critique Bylund's work. While the author agrees with Bylund's ideas, there could be alternative perspectives that the author could explore to provide a more comprehensive understanding of the market and economy.