Questioning the Market
Through the years, many professionals have outlined their viewpoint on our society and entrepreneurship, and their direct impact on their viewpoint on our society and entrepreneurship, and their direct impact on the economy. Entrepreneurs create their own businesses centered around products or services that require an abundance of resources. If consumers share an interest in the idea, they will voluntarily exchange their capital for the given product or service at hand. However, despite the substantial time and effort required to bring these ideas to fruition, there is no guarantee of this exchange taking place. Therefore, Bylund argues that the capital, time, and resources used for any given idea can be utilized in a more efficient manner.
This tradeoff is the economic cost that all business owners must face. While many attempt to lower this cost, everyday entrepreneurs around the world are dealing with these tradeoffs that determine the future of their company. Because so many businesses are making these choices, our economy is impacted every day. This is why Bylund believes, oneurs create their own businesses centered around products or services that require an abundance of resources. If consumers share an interest in the idea, they will voluntarily exchange their capital for the given product or service at hand. However, despite the substantial time and effort required to bring these ideas to fruition, there is no guarantee of this exchange taking place. Therefore, Bylund argues that the capital, time, and resources used for any given idea can be utilized in a more efficient manner.
This tradeoff is the economic cost that all business owners must face. While many attempt to lower this cost, everyday entrepreneurs around the world are dealing with these tradeoffs that determine the future of their company. Because so many businesses are making these choices, our economy is impacted every day. This is why Bylund believes, on a grand scale, the economy and market are inseparable ideas. (Bylund, 2016, p.2). He states,
However, the market specifically references the exchange between consumer goods and services. Meanwhile, a massive economy has a mind of its own, and operates within its own laws that cannot be seized by any individual. (Bylund, 2006, p. 15).
I agree with his overall premise. However, I would argue that while the economy cannot be seized by a single person, it can be largely affected by one. As an example, if the CEO of Apple or Mercedes were to switch their business approach, their competitors would take note of the success or failures of these decisions and determine their plan of action. With these companies, one change they make in their business can manipulate the entire market. For larger markets such as consumer electronics or automotives, increases or decreases in profits can play a part in our economy. This is why I would argue that CEOs of the mass powerhouses have some controlling power in the shape of our economy. After outlining the differences, and depicting a model for economic comprehension, Bylunda puzzles the reader by questioning the norm, asking his audience, Does it work? Well, it depends on what we mean by "work" (Bylund, 2006, p.3).
Following his in-depth analysis, he makes the reader stop and think about the pros and cons of the current economic system. In the free market economy, we are given the freedom to exchange items, to the benefit of both parties. However, does this work? How could the answer possibly be no? How could a system we have all thrived under not work? This is quite simply because we do not truly understand the economic system we live within. We have only been taught to see one dimension of this equation, and Bylund is looking to open our minds.
Diving into the Market
Whenever economics is brought into conversation, many of us associate this topic directly with wealth and financial systems. This comes largely in part due to the large influx of scholars who have determined,
The aim of economics is to understand how an economy, in all its shapes and forms, works: the nature and workings of the overall process of people making their own decisions, acting, and interacting as they see fit. (Bylund, 2002, p.19)
Simply put, those who study this field are believed to be students of the fiscal structure who aim to understand the causes and effects of human actions and interaction that affect the natural order of the economy. These individuals use knowledge gathered, in conjunction with monitoring human tradeoff values, to build a strong intuition and business sense. (Bylund, 2002, p. 19). While I agree with the methodology and direct application, I believe from this viewpoint we have only scratched the surface. Bylund outlines his universal perspective on the theory of economics when he states,
“The economics of old sought to uncover how the world works. It showed, or even proved, that there is a natural order to it. There is structure to the apparent chaos.” (Bylund, 2002, p. 15)
This definition can span far larger than topics of wealth. I believe this theory should be used universally as a method that aims to uncover the natural order all people, objects, and abstract ideas work under.
The Economic Theory
Similarly, in other fields of study, scholars of economics have utilized an abundance of market research and tests to develop a philosophy that allows their audience to understand the true meaning of the subject. The Economic theory was developed to educate viewers on the structure and function of our economy. The premise of this idea is based around the thought that all human actions come because of purposeful behavior, and all individuals do designated actions to achieve something in mind. These behavioral methods directly sway the global economy. Bylund explains his theory when he states,
Economics is based on 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 that means the reason they try to achieve it is that they value the expected outcome in some way.” (Bylund, 2022, P. 22)
From my standpoint, economics is simply the application of psychology within the financial field. Psychology, the scientific study of the mind and behavior, is explored across all subjects with the objective of describing, predicting, and changing or controlling behaviors. Meanwhile, monetary researchers are exploring the unknown phenomenon of human behavior and its direct correlation to the principles of money to explain and anticipate the changes that will occur in the economy. Their studies are outlined with in depth topic questions such as, what makes our minds think in unique ways? What are our thinking patterns, and how do they affect our daily lifestyles? Through thorough analysis, economists and psychologists use these sorts of questions to explore the depths of the brain in their field.
The Parallels of Two Fields
The parallels between the principles of economics and psychology are further personified in Bylund’s, A Process, Not a Factory. The short story walks the audience through several retailers importing higher-quality goods in a more efficient manner in comparison to their competitors. These actions are what allow companies to outperform others in the market and stand the test of time. Bylund talks about the survivors of the competitive weeding out process when he states,
“It is because these busi- nesses were better—more productive, offered higher- quality goods, etc.—that they are currently in business. And they will stay in business only if they continue to be better than the competition” (Bylund, 2022, p. 46).
Economic theory has taught us to understand that companies are able to maintain an edge over their competition by analyzing human behavioral patterns and their effect on the market flow. Over time, updates in technology, changes in culture, and other external factors have influenced customers' chain of behavior, which in turn has caused businesses to innovate their products and marketing methods. As a result, as time progresses, companies are forced to constantly update themselves to maintain an edge in their marketplace.
This is another underlying message being conveyed in A Process, Not a Factory. Bylund gives us a deep dive into the importation process of products into store chains and connects these illustrations with his overlying theme regarding the economy. Items sold on the shelves of retailers are not simply a state, but an entire process that has led them to that point. There is a long list of supply chain farms, technicians, and factory workers that are repeatedly working together in the production process to bring these products to life. Similarly, with customers only seeing an item on a store shelf at face value, many do not recognize the complexity of our economy. Thousands of factories and industrial plants across the world are continuously updating their machinery to maintain efficiency. These changes impact the production, which in turn affects the quality of a product, and consequently can make or break a company’s objective. Each of these variables, and many more, play an instrumental part in every business. Changing a single variable for one business can impact them all and shift the entire market permanently.
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.