Before beginning, I am highly grateful and impressed by the success and spread associated with my previous work “ Consumers, Workers, and Monopolies: Free Markets Serves All. ” The article aimed to provide a brief explanation of the significance of consumers in Markets and it will be continued further .
The market can be controlled either by consumers or the government. Any one of them getting greater power will reduce the power and independence of others. The reason behind government getting more support and customers being completely neglected is a result of a fantasy called “ equality. ” In economics, understanding the market is very important that brings great significance towards the role of consumers.
No mathematics or statistics can tell about consumers’ change in preferences and their particular source of satisfaction. The consumer themselves can deal with his/her options and hence manage their spending budget constraint accordingly. Mises was a critique of socialism and disliked the fact that the consumers who pay their hard-earned money for scarce resources are completely ignored. Based on Mises, no entrepreneurs, simply no farmers, and not even the capitalist decides what has to be created, it is the consumers who accomplish that.
Consumers and Workers
Which wide belief of several certain ideologists to consider on their own to be “ moral” when their system failed to operate history. But how is this fair that the one spending cash has to sacrifice their goods and services for someone who is charging for their work? Not giving freedom and choices to consumers in the market takes away their sovereignty and gives it to people at the top with power.
Without the profit motive, consumer sovereignty isn’t probable, that’s the complexity of markets which many don’t seem to understand. The entrepreneurs or companies are going to produce as per consumers’ preference which they got to know through signals and without revenue motive the consumer isn’t a concern but is replaced simply by workers. Workers might enjoy their good wages initially, but people forget the same population of the working class is consuming as well and hence it will eventually harm all of them. It is nowhere fair that will consumers are not considered important for the sake of workers due to the fact consumers constitute the entire human population unlike the latter.
Mises noted that even though the real boss is the consumers in the market, this case doesn’t use in the case of monopolies. Public Monopolies that are very well supported with regard to workers’ rights are the most dangerous to consumers. The power over the market shifts from just about all (consumers) to some (in power). Cronies might fall in this category too but are better as there isn’t generally one firm involved. The reason behind the failure of socialism/market socialism is that the monopoly are unable to do better than consumers. Consumers decide for themselves rather than a few sets of planners carrying it out and this is what they missed, in their obsession with workers they forgot the part and importance of consumers.
The same can’t be put on Private Monopolies in the totally free market, their existence like a monopoly in long run will be difficult but even if they actually, they still have to keep competition out by satisfying the consumers like no other brand new player could do and in this the consumers still benefits and the market in long run is in control of them. Google which isn’t solely a monopoly but regarded one is succeeding because of its best service which is probably some thing nobody can deny and the reason why Microsoft dominated designed for very long was for their consumer-friendly services.
There is a knowledge problem as it is very impossible to understand what the choices of consumers will be in the future, what will be climatic situations, and the like. Recently there is a widespread perception that AI and computer systems can do the job and in easy words control humans nicely. Mises’s Calculation problem is the work of such genius that people aren’t still capable to grasp it well even with almost one hundred years. However there will also remain a knowledge problem because Hayek clearly explained this “ tacit” knowledge cannot to recorded in statistical form, so, just how much AI is possible with no Statistics or Data?
In the debate associated with supply versus demand in economics, F. A. Hayek showed the importance of prices in an exceedingly different way and described that prices transfer understanding according to which the market players take decisions. Neither Requirement nor to an extent supply can be controlled because of the restriction of resources but the prices are something that one can modify and hence adjust themselves towards the market conditions. Entrepreneurs along with help of price indicators can understand the preference of shoppers and also the scope of entry-and-exit in the market field. Prices give signals to consumers as well, as said by Hayek people don’t need to know the reason behind the price changes but only require signals to make decisions within their purchases.
Costs play an important role in Consumer Sovereignty just like Personal Property as explained by Mises. Consumers don’t visit sellers telling them regarding their preferences, but the costs can do this work efficiently and also bring entrepreneurial growth in the economy which is very important to the particular prosperity of any modern society. Prices are something in the control of humans, though the costs are changed by the seller the control of it is within hands of consumers. Inflation is really a barrier to the price program as it leads to the spread of wrong signals to advertise players. Hence, they tend to make wrong decisions. Another issue is when the money supply is within the control of central authority, the prices are too and therefore the control gets shifted from consumers’ hands to the central bank.
It seems that the part of education is more crucial that you workers and consumers than entrepreneurs as it can motivate one to become an entrepreneur but cannot give them new ideas. Entrepreneurs require real-world experience plus an understanding of the market. Top quality education can enhance one’s skills and general knowledge which can help them obtain a better job. But , most of all education is what is required on the top-notch quality for consumers to make good choices because the market is dependent on that will. If the Bollywood industry associated with India is not able to provide quality films, then the blame need to primarily go to the viewers who are still ready to buy seat tickets. If fast foods are more popular, then the education system which properly teach the learners to follow a healthy diet should be questioned. Not checking the bill, expiration date, instructions, and other info and lacking understanding of customers’ rights are possible along with low-quality education.
Hence, it is important to take the strength of education from government. The control of education with the government will eventually give them control of consumers and hence the market! A free market gives liberty to consumers but as responsibility is always attached to Liberty, the responsibilities are discovered through the medium of education and learning.
It’s time to embrace the importance of consumers in society and not let their own hard-earned money be taken regarding granted and exploited by means of taxes, startup barriers, and regulations.