“Supply and demand” is a common response to many economic discussions. However, it is only PART of the discussion. There are MANY MANY MANY factors at play. NOT JUST supply and demand.
Last night I had a great (though short) discussion with a peer about political candidates and the economy. One of the topics (BRIEFLY) discussed was the unemployment/underemployment of college graduates. His solution was to reduce the number of college graduates because … you guessed it … supply and demand.
He is right. If we reduced the number of college graduates available for businesses to hire, businesses will have to offer the graduates available more. Yet, something nags at me. Something is screaming at me that this is a bad idea. Part of my peer’s argument was that if we continue to increase the number of college graduates, they will continue to get less and less because the supply would be greater than the demand. Thus, we should NOT make college more affordable and accessible for the masses.
Yet, something nags at me. Something is screaming at me that this is a bad idea. That something is all other causes and effects. Yes, one of the effects of having a large college educated population is reduced “reward” for that education. Yet, there is more to it.
Do you know what else is a result of having a large educated (college or otherwise) population? All the benefits of education. You have people making a better contribution to society and making it a better place. You have people making gadgets and gizmos. You have people increase the efficiency of operations. You have people using personal, group, or public resources to improve the environment. You have a happier society.
Increasing the education of the population may reduce the individual rewards, but it also increases the societal rewards. I recall hearing a comparison of today’s economy with yesteryear’s. The comparison goes something like the rich of yesteryear would be the poor of today.
That comparison reminds me of this discussion. A college education may not grant the same social-economic advantage as it did in yesteryear, but today’s society-economy is more advanced than yesteryear. Thus, progress and stuff.
In conclusion, supply and demand is not the entire answer. It is only part of the answer. What are other parts can you think of?
One way we can all help to end poverty is buy local hire local. When you buy from a local retail store, you are helping an individual support themselves. When a local business hires local people to help run the business, they too are helping an individual support themselves. … Or even a family.
Take a fraction of your budget and spend it with a local business. Have $100 budgeted for groceries? Spend $10 with a local farmer, bakery, or other take-home-yummies maker. Have two date nights budgeted a month? Spend one at a mom-and-pop diner, or pay a friend to make you dinner –after all she wants to open up a restaurant.
Do you know crafty people? What about aspiring entrepreneurs? In most cases, it doesn’t take much to help support your community.
Remember: BUY LOCAL!
the dominant social system in medieval Europe, in which the nobility held lands from the Crown in exchange for military service, and vassals were in turn tenants of the nobles, while the peasants (villeins or serfs) were obliged to live on their lord’s land and give him homage, labor, and a share of the produce, notionally in exchange for military protection.
Are we heading to a feudalistic society? Our rich keep getting richer and comparatively — and actually — our poor are getting poorer. I don’t want to live in a feudalistic society. Do you?
First off, classical economics in a nut is laissez-fair or “leave it alone and it will be fine.”
Up until the 1920s, recessions were more or less manageable. Perhaps not for those greatly affected, but society at large. Of course, the infrastructure of our society at the time could not have supported large government interference.
At the time, small communities were “thriving.” Everybody new their neighbor and few people moved far off from home upon reaching adulthood. Mothers made clothes for their family. If yoy hit hard times you could count on your community to lend a helping hand or at least provide small jobs so you could support your self.
At the turn of the century, society began to change. More and more people were moving to the city. We new fewer and fewer of our neighbors. It is my belief that this is where our roots of “support yourself you lazy bumb” really started to take root.
That’s why classical economics failed. People wanted more and more of the economic pie. Since people of power had the power to take what of the pie they wanted, they did. Since there was less pie to go around, the less powerful people had to borrow money in order to participate in the economic (false) boom of the time.
People of power no longer felt that they were accountable for the wellbeing of others because they weren’t around those of a “lesser” status. Had we continued to have the tight knit community we had before, powerful people would have been held more accountable.
Observations of society will show you that people of a higher social standing do not hold themselves accountable to those of a lower social standing. Bell hops for the most expensive apartments in Manhattan will tell you that most of the residents will only tip a few dollars (if that) because the residents know that amount is what would be expected at the lowest apartment buildings that still have bell hops.
Studies have shown that people who begin with an adherently better position believe they earned what wealth follows amd that those who started in a disadvantaged position deserve what poverty follows. Don’t believe me?
Check this link out: monopoly study
I am not saying that before the 20th century there were not greedy people. I am saying that there have always been greedy people and that as our society expands it becomes more and more difficult to hold (greedy) people of power accountable for taking care of their share of society. That is why classical economics has failed and why we now need keynesian economics. That is why we need a minimum wage. That is why we need regulations. Too many people will only give the bare minimum they are required to for society and they will take the rest.