It's certainly easy to get confused when hearing all the different theories involved in solving the economic woes we face today.
Sometimes, however, it pays to simply back up and look at the basics.
To do this, I need to define two primary terms: (1) the "makers" and (2) the "takers".
These terms refer to the two main entities in our economic world.
The makers are simply those people who make things or products; like farmers, manufacturers, builders and the like.
The takers are the ones who "take" what the makers make and do something with those things or products.
For instance, the takers will distribute or move the products from place to place, or they will advertise the products to others, or even sell them to others, even fix them.
Now we know that these things or products will accumulate endlessly unless they are consumed! So, in our economic world, we must have "consumers".
Consumers are made up of BOTH makers and takers.
As a simple example, a farmer (maker) can go to the local market (a taker) and purchase or consume any other product that he needs; and so can the market owner go and purchase or consume any product for his/herself.
OK so far, but now where does "the economics" come into play? Well, the economics involved determine how much or even what type of things and products the makers make.
It drives the takers to take and advertise, distribute and sell these products.
The "driving" force is governed by the principles of "our Law of Supply and Demand".
If consumers want more of a particular thing, the makers will make and the takers will take, and then the consumers can consume.
The converse is equally true.
It's really that simple.
Another term that is often used in making an analogy of the concept, is that "water seeks its own level".
When consumers have enough of an item or they think it too expensive (or whatever), then the demand reduces.
The takers then stop taking, and the makers will stop making.
When we "artificially" interfere with or try to manipulate this concept (for whatever motivation), we get into trouble.
In my following articles on this subject, I will look at some common ways that we have tried to manipulate this economic concept and what happens as a result.
Sometimes, however, it pays to simply back up and look at the basics.
To do this, I need to define two primary terms: (1) the "makers" and (2) the "takers".
These terms refer to the two main entities in our economic world.
The makers are simply those people who make things or products; like farmers, manufacturers, builders and the like.
The takers are the ones who "take" what the makers make and do something with those things or products.
For instance, the takers will distribute or move the products from place to place, or they will advertise the products to others, or even sell them to others, even fix them.
Now we know that these things or products will accumulate endlessly unless they are consumed! So, in our economic world, we must have "consumers".
Consumers are made up of BOTH makers and takers.
As a simple example, a farmer (maker) can go to the local market (a taker) and purchase or consume any other product that he needs; and so can the market owner go and purchase or consume any product for his/herself.
OK so far, but now where does "the economics" come into play? Well, the economics involved determine how much or even what type of things and products the makers make.
It drives the takers to take and advertise, distribute and sell these products.
The "driving" force is governed by the principles of "our Law of Supply and Demand".
If consumers want more of a particular thing, the makers will make and the takers will take, and then the consumers can consume.
The converse is equally true.
It's really that simple.
Another term that is often used in making an analogy of the concept, is that "water seeks its own level".
When consumers have enough of an item or they think it too expensive (or whatever), then the demand reduces.
The takers then stop taking, and the makers will stop making.
When we "artificially" interfere with or try to manipulate this concept (for whatever motivation), we get into trouble.
In my following articles on this subject, I will look at some common ways that we have tried to manipulate this economic concept and what happens as a result.
Source...