Module 8 Essay: Seen/Unseen/Taxation
Blaze K. Munoz
Department of Entrepreneurship, Oklahoma State University
EEE – 2083 Entrepreneurship & Society
Professor Trost
April 19, 2023
Abstract
In chapters 5, “The Seen and the Unseen” and 7, “Taxation and Regulation” the author Per L. Bylund illustrates how what we see in the economy hides the other reality of what we do not see. One situation means another does not happen. Causing the unseen to basically not exist; however, still have impact. The authors later goes on to discuss the effective and ineffective regulations and the impact they have on the economy. Lastly, the author discusses the impact of prohibition and how it differs from regulation.
The Seen and the Unseen
Seen/Unseen
Chapter 5, “The Seen and the Unseen”, in the book “The Seen, the Unseen, and the Unrealized”, by Per L. Bylund, the author starts the chapter off explaining the process behind exchange. For the exchange to follow through, both parties must expect to leave better off than prior to the exchange. This transaction is the origin of capitalism, which we learned in last week’s reading. These transactions do not only occur with the elites, but with every individual on a daily basis. Every purchase that is finalized is the consumer receiving a more valued item than the money they spent. For instance, if I buy a pair of shoes for 80 dollars, I value the shoes more than 80 dollars. In addition, the manufacturer must value the product less than the selling price, because if not then they would not be benefiting from the transaction. The author goes on to explain struggles this may cause some entrepreneurs.
“This means is that the totality of exchange affects how entrepreneurs anticipate that they will be able to satisfy consumer wants; to put it differently, it affects where and how entrepreneurs anticipate making adjustments to production plans as entrepreneurs revise their expectations and thus their investments in production plans…” (Bylund, 2016, p. 83).
This makes it hard for entrepreneurs to know what move to make next; especially, those who are not cabled to adapt to our fast-changing society. That is why those who are able to adapt to the environment around them are usually the ones who are most successful. When it comes to the economy and the process behind it, there is a lot that goes unseen, as well a seen. For example, the author uses a boy breaking a window in his father’s business, now what we see is him paying the fixer to fix the window, to which he could use for a family matter, towards his business, or even towards his employees. However, what we do not see is the other reality to where the window is not broken, and he saves the money for the window to go towards something else. Meaning, we do not see how the money could have been used due to what we saw, the window being broken.
Taxation and Regulation
Regulation
In chapter 7, “Taxation and Regulation”, in the book “The Seen, the Unseen, and the Unrealized”, by Per L. Bylund, the authors touches on the topics of taxations and regulation. The author starts off discussing effective regulation. First off,
“the purpose of regulation is to change completely or influence behavior in some specific way to thereby suae a different outcome of the production and activities that take place in the market” (Bylund, 2016, p. 115).
Ineffective regulation is where there is a fail to change.
For example, if there is a regulation to grow apples a certain way, but Adele does not like that way or finds her way more efficient, then the regulation would be considered ineffective, due to the lack of change (Bylund, 2016, p.115).
In addition, if there is a regulation to grow apples a certain type of way, and Adele grows Granny smith apples, which is not in the regulation, then is ineffective towards Adele. Further in the chapter, the author discusses the impact of regulation.
“The type of regulation that is intended to steer rather than prohibit production consists of what we might refer to as both “carrot (incentive) and “stick” (disincentive) (Bylund, 2016, p. 118).
For instance, if there is a switch from solar panels to electric power, there is not a prohibition, just a different type of electricity, making the situation a “carrot”. On the other hand, there are regulations in the form of straight up prohibition. This is essentially where entrepreneurs are forced to renovate their economic calculations and basically redo their method of production. Prohibition does not only change the structure, cost, production, but every decision made from start to finish must be redone.
Works Cited
Bylund, P. L. (2016). Chapter 5: Unbeatable, Imperfect Markets. In Seen, the unseen, and the unrealized: How regulations affect our everyday lives (pp. 73–82). essay, Lexington Books.
Bylund, P. L. (2016). Chapter 7: Unbeatable, Imperfect Markets. In Seen, the unseen, and the unrealized: How regulations affect our everyday lives (pp. 99–115). essay, Lexington Books.
Great work in your work! I agree with a large portion of your response. As you mentioned,
This is a great summarizing piece outlining both chapters from this week’s material, as well as previous chapters regarding the makeup of capitalism. In my opinion, this system of government is primarily predicated around good faith. One party will provide a gift that satisfies another’s wants or desires. To do so, the individual must take the time to fully understand the recipient. The beneficiary takes notice of the sincerity behind their gift giving and is inspired to reciprocate this action. This prestigious cycle takes on an endless format and breeds competition amongst mutual parties.
On an individual level, we make exchanges each day based on the values we place on items. However, value is subjective, and price pointing to any item at a mutually beneficial cost is very challenging. This decision making process is outlined as an opportunity cost by Bylund. Entrepreneurs must understand their consumer base well enough to price point their merchandise at a level high enough that they will receive profits, while not losing out on their customer base to a varying degree. As you thoroughly outlined in your response, this connects back to the theme Bylund was conveying in chapter five. As personified by the title, the process of opportunity cost has many levels. Some are visible, some are not. Bylund uses multiple examples to translate this message, including the example of a young boy breaking his parent’s window. The family makes the decision to pay for the repair of the broken window. Because of this decision, they forfeit the opportunity to use those funds in any other beneficial way. This decision outlines the value the father has in fixing the house. What can be seen in this example is the father’s visible frustration with his child’s mistakes. What cannot be seen is the thought process he is undergoing as he measures the price it will take to fix these issues.
I struggled a bit more with this section of your response to understand your stance/opinion. During this chapter, the author demonstrates effective and ineffective regulations while providing examples of their appearances. However, you did a great job summarizing Bylund’s points and connecting it back to the examples he used.