joeyjoe367
10-17-2002, 06:58 PM
Well, I'm writing an essay for my economics class, and i wanted to get some oppinions on it. If you've taken any beginning level economics, you can probably understand most of it, but even if you haven't, hopefully you can learn something...
well, here goes:
************************************************** ******
Market, Command, Tradition and how it applies to us
In human life there are always material needs. Food to sustain us, homes to shelter us, and many other things that we as humans use and do to further our pursuit of happiness. How these items are produced, and how they get to us is called "Material Life" and are composed of three things: The Market, Command, and Tradition. Although it may seem that here in the United States The Market is the main driving force of our economy, all three aspects directly effect our Material Life and in some cases, conflict.
The most rudimentary and basic organization of material life is in Tradition. Whether it be the hunter-gatherer lifestyle of stone-age humans, or the abolished caste system of India, tradition has always effected the means in which we achieved our material life. In the Caste system of India, one's caste would determine what your occupation would be, what your diet was like, and even the interaction between yourself and those of other castes. Someone of a high caste would enjoy wealth and many oportunities whereas those of a lower class were restricted to more menial tasks[2]. If you were a stone-age hunter-gatherer, you would have survived by learning the things that your fellow tribe members learned and passed on to you. Migratory patterns and prime hunting areas were also passed down from generation to generation as they were a key to survival[3]. The traditional ways of providing for one's material life odveously worked or humanity would have ceased to exhist.
Although Tradition is no longer essential survival, it continues to have an effect on how we carry out our material life. One may choose a profession because a parent or other ancestor was a patron of that profession. Traditionally, one of a lower-middle class may not be expected to attend higher education at a college whereas it is expected of those of a higher class. Similarities to the Indian caste system can vaguely be recognized, however there is a much greater degree of freedom in the social system of The United States today.
Command is the means in which our government most directly manipulates our nation's economy. The government can effect the prices of many products in the manner of tarrifs and taxes. Here in Washington State, Tobacco producs such as cigarettes have a specific tax upon them; the 3rd highest tax rate in the nation [4]. As the law of demand explains, as prices increase, consumers are less likely to purchase a product. In this case, the tobacco companies either choose to take in a lower revenue by lowering the price of their product in order to compensate for the tax, or to risk lower volumes of sales by maintaining their price. These laws are passed by the command of our government, and allow these kind of taxes to be placed.
The Government, through command is constantly manipulating prices and attempting to keep healty competition going. This is easily seen through one of the government's agencies, the Anti-Trust Division of the Department of Justice. they " prohibit a variety of practices that restrain trade, such as price-fixing conspiracies, corporate mergers likely to reduce the competitive vigor of particular markets, and predatory acts designed to achieve or maintain monopoly power." [5] If a true free-market economy is allowed to continue, monopolies are almost inevitable, however the government, for the sake of the consumer, prevents monopolies. Another example of the government's manipulations of prices is the agricultural industry in america; specifically the wheat industry. Since wheat is an inelastic product and all wheat is essentially the same product, the only variable in pricing of wheat is the supply or quantity that is produced from year to year. In years of surplus, a farmers must lower the price of their produce in order to sell it, however the costs to produce the wheat is the same. This results in massive deflation of wheat prices. The government interferes with this industry by subsidizing specific farms, and sometimes paying farmers to leave some of their lands unplanted[6]. In this manner, wheat prices are kept relatively stable.
As Stated previously, The Market is odveously the most powerful section of our material life in The United States. Most prices are not set by any governing agency, but by the consumers; not by specifically stating what a fair price for a specific item is, but by simply deciding whether or not to purchase that item. From there, the seller of that item can raise or lower the price of their product to help sell, or to increase revenue from the sale of the Item. Competition is also another guiding factor in determining market values. If as consumer is provided with two equivelant products, he will purchase the product that is cheaper; he gets the same product for less of his money. In this manner, supply and demand orchestrate the values of thousands of products today
Setting prices, however, is not the only purpose of The Market. Would someone spend the time and money to become an aerospace engineer or a computer programmer if the job was low-paying? No they would not. "Market Forces" [1] ensure that training in such a job is worthwhile, or another job not so worthwhile. If too many people decide to become engineers or programmers, employers can lower wages or remove certain benefits, thus discouraging others from pursuing careers in those fields. On the other hand, if there is a lack of programmers or engineers, employers will have to raise wages in order to attract the needed workers, and encourage others to pursue careers in those fields.The market directly effects the daily decisions of many people, and our economy.
Then comes the question as to what should be left to the market, and what should be left to society and command? The most apparant example is the situation of minimum wage. The Market is easily able to determine the wages of unskilled/menial labor, however our Government sets a minumum wage that employers must pay their employees. The reason for this is that the number of unskilled laborers is much higher than the positions available for them, and for this reason they can be easily replaced. For example if there were no minimum wage, and someone were to ask for $10 per hour for a job, the employer has a vast number of other possible employees. He would then look for someone who would work for the lowest price; perhaps someone who does not need to support a family, and thus willing to work for less. Letting the market determine the lowest wage in this manner is simply not ethical. The government steps in and by command sets a minium wage according to the cost of living in that area. As of January 2003, the Washington State minimum wage will be increasing to $7.01 per hour in accordance to the rising costs of living in the state[7]. In this way, the government is able to care for the lower class citizens of it's state.
Another example of the conflict between the Market and Command is seen in the Anti-Trust division of the Department of Justice. The most publicized case is probably Microsoft's and their attempt to monopolize the internet through the web browser "Internet Explorer." Microsoft has destroyed competition in the internet browsing scene by providing Internet Explorer, with the operating system Windows, for free. Some see this as simple "good business" simmilar to Gillette, giving away the razor and selling the blades, however the government doesn't see it this way. With the growing importance of the Internet and information systems in general, destroying competition would result in inflation of product prices; the consumer has no choice but to use Microsoft's product at which the price could be set unreasonably high.
Although it may seem that the command is simply interfering with the market, there are situations where command is actually preferable to allowing the market to set it's own prices. Efficiency is one of the main reasons command is more practical than allowing free market to run amok. Imagine having five differant companies' digging and placing water piping with the hope that competition would drive down the price of water. The idea is preposterous. Having so many pipes installed, and only using a fraction of them is simply inefficient. For this reason, we let command dictate the installation of roads, sewage piping, water piping, and the distribution of electric power
Tradition, command and the market all Interact with eachother in providing us with our material lives. The market is currently the main channel through which our material live is obtained, however tradition and command both play significant roles. The freedom provided by our market-dominated system in The United States is one of the reasons that "The sky's the limit" in the business world today and the reason why we, as Americans, have the ability to control our own economic destiny.
Notes:
[1] Taylor, Kit S. Human Society and the Global Economy. Atomic Dog Publishing.com. January 2002.
[2] Caste and The God of Small Things. August 17, 1998. Allison Elliot. Emory University. October 15, 2002.
URL:http://www.emory.edu/ENGLISH/Bahri/caste.html
[3] "Hunter-Gatherers," Microsoft Encarta Online Encyclopedia 2002. URL: http://encarta.msn.com © 1997-2002 Microsoft Corporation. October 17, 2002.
[4] State Tax Rates on Cigarettes. July 1, 2002. Tax-Admin.org. Oct 17, 2002.
URL: http://www.taxadmin.org/fta/rate/cigarett.html
[5] Department of Justice/Anti-Trust. Oct 3, 2002. Department of Justice. Accessed Oct. 17, 2002.
URL: http://www.usdoj.gov/atr/index.html
[6] Government's 50 Greatest Endeavors: Stabilize Agricultural Prices. Brookings Institute. Accessed Oct 17, 2002.
URL: http://www.brook.edu/dybdocroot/gs/cps/50ge/endeavors/agriprices.htm
[7] Minimum Wage Employment Standards. Washington State Department of Labor and Industries. Accessed Oct 17, 2002. URL: http://www.lni.wa.gov/scs/workstandards/minwage.htm
well, here goes:
************************************************** ******
Market, Command, Tradition and how it applies to us
In human life there are always material needs. Food to sustain us, homes to shelter us, and many other things that we as humans use and do to further our pursuit of happiness. How these items are produced, and how they get to us is called "Material Life" and are composed of three things: The Market, Command, and Tradition. Although it may seem that here in the United States The Market is the main driving force of our economy, all three aspects directly effect our Material Life and in some cases, conflict.
The most rudimentary and basic organization of material life is in Tradition. Whether it be the hunter-gatherer lifestyle of stone-age humans, or the abolished caste system of India, tradition has always effected the means in which we achieved our material life. In the Caste system of India, one's caste would determine what your occupation would be, what your diet was like, and even the interaction between yourself and those of other castes. Someone of a high caste would enjoy wealth and many oportunities whereas those of a lower class were restricted to more menial tasks[2]. If you were a stone-age hunter-gatherer, you would have survived by learning the things that your fellow tribe members learned and passed on to you. Migratory patterns and prime hunting areas were also passed down from generation to generation as they were a key to survival[3]. The traditional ways of providing for one's material life odveously worked or humanity would have ceased to exhist.
Although Tradition is no longer essential survival, it continues to have an effect on how we carry out our material life. One may choose a profession because a parent or other ancestor was a patron of that profession. Traditionally, one of a lower-middle class may not be expected to attend higher education at a college whereas it is expected of those of a higher class. Similarities to the Indian caste system can vaguely be recognized, however there is a much greater degree of freedom in the social system of The United States today.
Command is the means in which our government most directly manipulates our nation's economy. The government can effect the prices of many products in the manner of tarrifs and taxes. Here in Washington State, Tobacco producs such as cigarettes have a specific tax upon them; the 3rd highest tax rate in the nation [4]. As the law of demand explains, as prices increase, consumers are less likely to purchase a product. In this case, the tobacco companies either choose to take in a lower revenue by lowering the price of their product in order to compensate for the tax, or to risk lower volumes of sales by maintaining their price. These laws are passed by the command of our government, and allow these kind of taxes to be placed.
The Government, through command is constantly manipulating prices and attempting to keep healty competition going. This is easily seen through one of the government's agencies, the Anti-Trust Division of the Department of Justice. they " prohibit a variety of practices that restrain trade, such as price-fixing conspiracies, corporate mergers likely to reduce the competitive vigor of particular markets, and predatory acts designed to achieve or maintain monopoly power." [5] If a true free-market economy is allowed to continue, monopolies are almost inevitable, however the government, for the sake of the consumer, prevents monopolies. Another example of the government's manipulations of prices is the agricultural industry in america; specifically the wheat industry. Since wheat is an inelastic product and all wheat is essentially the same product, the only variable in pricing of wheat is the supply or quantity that is produced from year to year. In years of surplus, a farmers must lower the price of their produce in order to sell it, however the costs to produce the wheat is the same. This results in massive deflation of wheat prices. The government interferes with this industry by subsidizing specific farms, and sometimes paying farmers to leave some of their lands unplanted[6]. In this manner, wheat prices are kept relatively stable.
As Stated previously, The Market is odveously the most powerful section of our material life in The United States. Most prices are not set by any governing agency, but by the consumers; not by specifically stating what a fair price for a specific item is, but by simply deciding whether or not to purchase that item. From there, the seller of that item can raise or lower the price of their product to help sell, or to increase revenue from the sale of the Item. Competition is also another guiding factor in determining market values. If as consumer is provided with two equivelant products, he will purchase the product that is cheaper; he gets the same product for less of his money. In this manner, supply and demand orchestrate the values of thousands of products today
Setting prices, however, is not the only purpose of The Market. Would someone spend the time and money to become an aerospace engineer or a computer programmer if the job was low-paying? No they would not. "Market Forces" [1] ensure that training in such a job is worthwhile, or another job not so worthwhile. If too many people decide to become engineers or programmers, employers can lower wages or remove certain benefits, thus discouraging others from pursuing careers in those fields. On the other hand, if there is a lack of programmers or engineers, employers will have to raise wages in order to attract the needed workers, and encourage others to pursue careers in those fields.The market directly effects the daily decisions of many people, and our economy.
Then comes the question as to what should be left to the market, and what should be left to society and command? The most apparant example is the situation of minimum wage. The Market is easily able to determine the wages of unskilled/menial labor, however our Government sets a minumum wage that employers must pay their employees. The reason for this is that the number of unskilled laborers is much higher than the positions available for them, and for this reason they can be easily replaced. For example if there were no minimum wage, and someone were to ask for $10 per hour for a job, the employer has a vast number of other possible employees. He would then look for someone who would work for the lowest price; perhaps someone who does not need to support a family, and thus willing to work for less. Letting the market determine the lowest wage in this manner is simply not ethical. The government steps in and by command sets a minium wage according to the cost of living in that area. As of January 2003, the Washington State minimum wage will be increasing to $7.01 per hour in accordance to the rising costs of living in the state[7]. In this way, the government is able to care for the lower class citizens of it's state.
Another example of the conflict between the Market and Command is seen in the Anti-Trust division of the Department of Justice. The most publicized case is probably Microsoft's and their attempt to monopolize the internet through the web browser "Internet Explorer." Microsoft has destroyed competition in the internet browsing scene by providing Internet Explorer, with the operating system Windows, for free. Some see this as simple "good business" simmilar to Gillette, giving away the razor and selling the blades, however the government doesn't see it this way. With the growing importance of the Internet and information systems in general, destroying competition would result in inflation of product prices; the consumer has no choice but to use Microsoft's product at which the price could be set unreasonably high.
Although it may seem that the command is simply interfering with the market, there are situations where command is actually preferable to allowing the market to set it's own prices. Efficiency is one of the main reasons command is more practical than allowing free market to run amok. Imagine having five differant companies' digging and placing water piping with the hope that competition would drive down the price of water. The idea is preposterous. Having so many pipes installed, and only using a fraction of them is simply inefficient. For this reason, we let command dictate the installation of roads, sewage piping, water piping, and the distribution of electric power
Tradition, command and the market all Interact with eachother in providing us with our material lives. The market is currently the main channel through which our material live is obtained, however tradition and command both play significant roles. The freedom provided by our market-dominated system in The United States is one of the reasons that "The sky's the limit" in the business world today and the reason why we, as Americans, have the ability to control our own economic destiny.
Notes:
[1] Taylor, Kit S. Human Society and the Global Economy. Atomic Dog Publishing.com. January 2002.
[2] Caste and The God of Small Things. August 17, 1998. Allison Elliot. Emory University. October 15, 2002.
URL:http://www.emory.edu/ENGLISH/Bahri/caste.html
[3] "Hunter-Gatherers," Microsoft Encarta Online Encyclopedia 2002. URL: http://encarta.msn.com © 1997-2002 Microsoft Corporation. October 17, 2002.
[4] State Tax Rates on Cigarettes. July 1, 2002. Tax-Admin.org. Oct 17, 2002.
URL: http://www.taxadmin.org/fta/rate/cigarett.html
[5] Department of Justice/Anti-Trust. Oct 3, 2002. Department of Justice. Accessed Oct. 17, 2002.
URL: http://www.usdoj.gov/atr/index.html
[6] Government's 50 Greatest Endeavors: Stabilize Agricultural Prices. Brookings Institute. Accessed Oct 17, 2002.
URL: http://www.brook.edu/dybdocroot/gs/cps/50ge/endeavors/agriprices.htm
[7] Minimum Wage Employment Standards. Washington State Department of Labor and Industries. Accessed Oct 17, 2002. URL: http://www.lni.wa.gov/scs/workstandards/minwage.htm