What is Business Exchange “Market Economy” All About


What is Business Exchange “Market Economy” All About

BX:Market Economy

There is a general misconception that the Market Economy is necessary a “trickle-down” economics of free market speculation and concentration of capital that is reflecting only free self adjusting supply of goods and services to a responding demand for such goods and services,

However Market Economy should be a properly responding under current economic conditions system of economics that balance the market Demand-to-Supply;

Based on the old ideological approaches Market Economics should follow the basic economic principles setup by Karl Marks and John Locke of self adjusting dialectic spirals of economic development: simply said, economics of production based economy and market, of high interest rate lending, of return of invested capital, of general concentration of capital by the very few, so this capital could come back as investment to open new employment for the masses. This system performed quite well through last couple of centuries when even hitting some turbulences like the Great Depression of the late 30s any many small recessions and depressions the system still succeeded in establishing a strong Middle Class and overall consistent economic development and growth. But, as it could be observed since the beginning of the 21st Century some processes of diminishing economic power of the Middle Class, some expanding poverty, some consistent Fiscal Shortages are becoming more alike a new picture then some previously experienced economic growth and development.

On a political basis the most recent slow economic growth in the US is blamed elsewhere: for some it is a result of not enough governmental interference on the economy for others it is a result of too much governmental interference on the economy that made things even worst.

However, neither the left nor the right version of the most recent economic sluggishness could reject the facts that the US industrial production has been greatly diminishing by being outsourced or even moved out of state to China and elsewhere, that supported by increasingly higher productivity has reduced industrial employment in a historical significance, and the process of such could not be reversed by anyhow;

 

There have been many years when the FEDS were fighting inflation in the late 2000s and such inflation never came even though energy prices were constantly going up alone with taxes, Medicare expenses, and insurance rates. The shadows of such “inflation” brought nightmares to the FEDS but instead they should fought the “shady business practices, corporate fraud to clearly hit over the small and medium businesses that were not financially capable to sustain long and costly court cases to get in many cases well earned money; deregulated financial exchanges, financing and banking institutions that used financial specula to clearly deceive small and medium investors; thus the fight against illusionary “inflation” substituted the real fight that was needed at its time the one against the widening gap between rich and poor that helped diminishing the Middle Class’s economic powers. The outsourcing and moving out industrial production, the deregulated financial and other business were well depriving the Middle Class from industrial jobs and investment opportunities, that added to the Stock Exchanges bust of the 1999 and the Great Recession of 2007-2009, the shrinking Return of Investment for the Middle Class, the lack of business opportunity on the US marketplace. Resulted of such economic upheaval especially of the last recession was a massive governmental interference into the financial and business sectors that prevented the market from crashing, and many financial institutions from going under.

However, a lot of the capital infused into the economy through stimulus packages and tax brakes could not prompt industrial production and the following high paid employment, because in first place the difference in standard of life to other countries especially China that has substantially less expensive labor, and in the second place, because of the high technologies in manufacturing that reduce employment irreversibly. To believe that under most recent economic conditions industrial employment could grow in a rate like in the past boosting economic growth needed to replenish Fiscal Reserves and reduce deficit and debt is not feasible;

Thus the role of Market Economics of the Market Economy is to show economic methods how to use economic “instruments” under these new economic conditions to balance the market “Demand-to-Supply” (the change of places from “Supply-to-Demand” is not an error), thus the Market Economics is not anyhow an ideological weapon for some right or left politicians in their “righteousness” but is a scientific (based on statistical information) economic method how to keep economy and marketplace under balance to prevent from violent economic flactuations.

http://sites.google.com/site/economicsofmarket/    

© Joshua Konov,2010

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