11. The Selective Process
The selective process of the market is actuated by the composite effort of all members of the market economy. Driven by the urge to remove his own uneasiness as much as possible, each individual is intent, on the one hand, upon attaining that position in which he can contribute most to the best satisfaction of everyone else and, on the other hand, upon taking best advantage of the services offered by everyone else. This means that he tries to sell on the dearest market and to buy on the cheapest market.
12. The Individual and the Market
It is customary to speak metaphorically of the automatic and anonymous forces actuating the “mechanism” of the market. In employing such metaphors people are ready to disregard the fact that the only factors directing the market and the determination of prices are purposive acts of men. There is no automatism; there are only men consciously and deliberately aiming at ends chosen. There are no mysterious mechanical forces; there is only the human will to remove uneasiness. There is no anonymity; there is I and you and Bill and Joe and all the rest.
13. Business Propaganda
The consumer is not omniscient. He does not know where he can obtain at the cheapest price what he is looking for. Very often he does not even know what kind of commodity or service is suitable to remove most efficaciously the particular uneasiness he wants to remove. At best he is familiar with the market conditions of the immediate past and arranges his plans on the basis of this information. To convey to him information about the actual state of the market is the task of business propaganda.
14. The “Volkswirtschaft”
The market economy as such does not respect political frontiers. Its field is the world.
In a market economy a major service that money provides is that of the medium of exchange. Producers exchange their goods for money and then exchange money for other goods.
As production of goods and services increase this results in a greater demand for the services of the medium of exchange (the service that money provides).
Conversely, as economic activity slows down, the demand for the services of money follows suit.
In an excellent article for The New Republic, April 6, 2015, “Rand Paul Will Break Republican Hearts, Just Like Reagan Did,” the Canadian journalist Jeet Heer displays a knowledge of libertarianism rare among mainstream journalists. Heer points out that Rand Paul’s bellicose foreign policy statements will make him lose support among libertarians.
Part Four: Catallactics or Economics of the Market Society
Chapter XIV. The Scope and Method of Catallactics
1. The Delimitation of Catallactic Problems
There have never been any doubts and uncertainties about the scope of economic science. Ever since people have been eager for a systematic study of economics or political economy, all have agreed that it is the task of this branch of knowledge to investigate the market phenomena, that is, the determination of the mutual exchange ratios of the goods and services negotiated on markets, their origin in human action and their effects upon later action.
2. The Method of Imaginary Constructions
The specific method of economics is the method of imaginary constructions.
