MUSINGS ON ECONOMICS AND THE NATURE OF DEMAND
Consider: No one ever got rich by producing things no one wanted, and that no one needed. Then, too, no one ever got rich producing things no one could buy. In order for a producer of something to profit from said production, some must need/want what is produced, and those who need/want it must be capable of doing, producing or furnishing whatever is sufficient to obtain it.
These facts are non-controversial to the point of being truisms.
In spite of the self-evident truth of the foregoing assertions, it appears that in some circles, the primacy of demand as the progenitor of economies, markets and financial systems does appear to be controversial. Still, even in the age of money, and the decoupling of money from value, one can scarcely see how that could be possible.
Therefore, it may be beneficial to examine the mechanisms of supply/provision and demand/need in a somewhat more prosaic sense – even to the point of over-simplification – so that, with ideology, complexity and symbolism stripped away, the bedrock basics of economics can be observed at their root.
Merriam Webster online describes economics as “a science concerned with the process or system by which goods and services are produced, sold, and bought.” This is perhaps one of the less complicated, and more realistic definitions available, and yet something more basic can be offered.
To begin with, all that is required is to read two different economics texts or treatises – any two – to be pretty thoroughly disabused of the notion that, in this day and age, there is anything approaching science involved in economics. The kindest thing that could be said about the modern study of economics is that it is just that – a study. The amount of opinion and supposition that accompanies this study on every hand largely precludes any idea that it could be characterized as a “science.” The next part of this definition with which one would take issue would be the idea of buying and selling. These pretty much presuppose the use of money. To get to the root of the matter, we must look at the mechanisms which are at work before money ever enters the picture. In other words, the mechanisms which created the preconditions for the invention of money.
It is enough, initially, to look at economics as being “the study concerned with the processes or systems whereby goods and services are produced, consumed, and traded.”
Later, money and monetization can (and should) be looked at, but there is economics before there is money, and the laws that govern it transcend its symbolic (monetary) representation. Insofar as there ARE laws, they must be as immutable as those of physics, mathematics, or any hard science, or they are not laws at all.
And the first law is this: Demand is the root of economics.
Consider: The moment there was life on planet Earth, it needed resources to survive, and demand was born. It may be argued that before there was life there WERE resources, and that life came from them. However, before there was life there was no meaning, and so the value of resources was as a nullity, because there was no one to need them. The moment a potential resource was useful, or needed, it became a resource, and the potential for “value” was only then implicit in it.
More later. 🙂
