How does "the market" regulate itself?
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How does "the market" regulate itself?
Another quote from Human Action... Don't blame me, blame Mises for being a smart guy.
"The direction of all economic affairs is in the market society a task of the
entrepreneurs. Theirs is the control of production. They are at the helm and
steer the ship. A superficial observer would believe that they are supreme.
But they are not. They are bound to obey unconditionally the captain’s
orders. The captain is the consumer. Neither the entrepreneurs nor the
farmers nor the capitalists determine what has to be produced. The consumers
do that. If a businessman does not strictly obey the orders of the public
as they are conveyed to him by the structure of market prices, he suffers
losses, he goes bankrupt, and is thus removed from his eminent position at
the helm. Other men who did better in satisfying the demand of the consumers
replace him."
This is a good illustration that shows how consumers regulate the market.
"The direction of all economic affairs is in the market society a task of the
entrepreneurs. Theirs is the control of production. They are at the helm and
steer the ship. A superficial observer would believe that they are supreme.
But they are not. They are bound to obey unconditionally the captain’s
orders. The captain is the consumer. Neither the entrepreneurs nor the
farmers nor the capitalists determine what has to be produced. The consumers
do that. If a businessman does not strictly obey the orders of the public
as they are conveyed to him by the structure of market prices, he suffers
losses, he goes bankrupt, and is thus removed from his eminent position at
the helm. Other men who did better in satisfying the demand of the consumers
replace him."
This is a good illustration that shows how consumers regulate the market.
Enron- Posts : 658
Join date : 2008-06-17
Age : 41
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