Casual remarks apropos of the Market System

Paul Paul Samuelson of MIT declared in 1989 that the Soviet economy can function and even thrive. China's economy has been booming after reforms as the market economy. Some economists construct abstract models with the constraint of time lag. The reality check would involve market forces rather than mathematical models per se. Such system means voluntary exchange between the buyer and the seller to their mutual benefit. Turmoil in the Middle East led to supply interruptions and the fear of more interruptions in the future. Consequently, such factors push up the price of oil, a reflection of economic reality. A central tenet of economies is that people make decisions on the margin. The marginal utility of a good or service is the amount of utility (satisfaction) we get when consuming one unit of it. If we are really thirsty, the marginal utility of the first glass of water is much higher than that of succeeding/successive cups because our thirst diminishes after the first glass. It is to be known that a person's income is no measure of his/her intrinsic worth, moral or otherwise. Economists, philosophers or thinkers could conjure up calculated risk but the human mind is to be the ultimate resource. The myth of Economics may be in the minds of students of economics ad infinitum. Francis Shieh a.k.a. Xie Shihao on Sunday, August 5, 2007