Not every change in material resources is a change in supply. For example, the rate at which the Sun burns energy is not controlled by humans, nor was it even known to us in the past. However, the Sun’s energy can effect demand nonetheless—for example, ice cream might become more popular if the sun heats up.. Thus the sun is a counterexample to the claim that changes in demand are all the result of changes in supply.
You might claim that the change in (quantity of) ice cream demanded is actually the consequence of increased ice cream production. That is true in the sense that if no more ice cream was produced then no more ice cream would be purchased. But we can also ask what caused the company to choose to increase production, and the clear answer is that the company thought the demand for ice cream would increase as a consequence of the heat wave. If there was no anticipation of increased demand due to external reasons, the ice cream company would not increase production and thus would miss out on potential profit.
Just to make completely sure I understand you here… you went looking for something that’s not a natural resource underlying major economic issues, but could still affect those issues, and the best answer you could come up with was the sun ? The local star, that gigantic nuclear furnace whose radiant energy is the source of power for all photosynthetic life on earth, excepting maybe some geothermal-powered grow-lights in Greenland or something. That sun, that’s the one you’re referring to?
If solar energy flux abruptly changed by even one percent, up or down, or was widely anticipated to do so, i don’t think unemployed ice cream manufacturers and salespeople would be the main economic consequence, or even noticeable among all the other chaos.
Supply is defined as that which is produced by human beings, not that which is made of physical matter. Otherwise, saying that demand only responds to changes in supply would fail to constrain our expectations any more than the laws of physics do. But we’re pursuing a different level of analysis when we engage economic questions.
You are looking at aspects of my example that are irrelevant to my argument. My point is that human decisions and innovations are not the only factors behind changes in demand. Whether or not we restrict our analysis to the ice cream market alone, the point stands that demand would be changed if the Sun’s behavior changed and thus we need to look at things other than changes to supply if we want to accurately predict changes in demand.
Henry George was looking at the labor market, and pointing out that you can’t really understand the causes of large-scale unemployment, “the paralysis which produces dullness in all trades,” without looking all the way back up the supply chain, if necessary to natural resources and how they’re being used or prevented from use, until you find something necessary that’s not being supplied. Can you find a counterexample to THAT claim, a cause for general unemployment which can’t be traced back to a lack of supply?
If by necessary you mean “in demand”, then yes I agree, otherwise I don’t know what you mean. You need to look at what products have unmet demand if you think the market’s being prevented from reaching full employment. But examining supply chains from the ground up isn’t a requirement for this, and actually no one understands the economy that well as it’s computationally impossible. So we look at intermediate simplified components of the supply chain and at demand itself. There are times when looking at an extremely detailed picture is necessary, but I don’t think that’s always so.
Two exceptions to this:
Governments can employ people to do jobs that aren’t demanded by the market.
There might not be enough resources for people to do any work that’s in demand. For example, if I am a farmer in a developing country and foreign food imports are priced lower than what my costs are, I will probably not be a farmer for much longer.
If by necessary you mean “in demand”, then yes I agree, otherwise I don’t know what you mean. You need to look at what products have unmet demand if you think the market’s being prevented from reaching full employment. But examining supply chains from the ground up isn’t a requirement for this, and actually no one understands the economy that well as it’s computationally impossible. So we look at intermediate simplified components of the supply chain and at demand itself. There are times when looking at an extremely detailed picture is necessary, but I don’t think that’s always so.
Two exceptions to this:
Governments can employ people to do jobs that aren’t demanded by the market but help society.
There might not be enough resources for people to do any work that’s in demand. To look at a small example, if I am a farmer in a developing country and foreign food imports are priced lower than what my costs are, I will probably not be a farmer for much longer.
If by necessary you mean “in demand”, then yes I agree, otherwise I don’t know what you mean. You need to look at what products have unmet demand if you think the market’s being prevented from reaching full employment. But examining supply chains from the ground up isn’t a requirement for this, and actually no one understands the economy that well as it’s computationally impossible. So we look at intermediate simplified components of the supply chain and at demand itself. There are times when looking at an extremely detailed picture is necessary, but I don’t think that’s always so.
Two exceptions to this:
Governments can employ people to do jobs that aren’t demanded by the market but help society.
There might not be enough resources for people to do any work that’s in demand. For example, if I am a farmer in a developing country and foreign food imports are priced lower than what my costs are, I will probably not be a farmer for much longer.
Supply is defined as that which is produced by human beings, not that which is made of physical matter. Scarcity is the word referring to limitation of resources, not supply.
You’re intentionally looking at aspects of my example that are irrelevant to the point I was making. My point is that human decisions and innovations are not the only factors that change demand. Whether or not we restrict our analysis to the ice cream market alone, the point stands.
Okay, thought things through.
Not every change in material resources is a change in supply. For example, the rate at which the Sun burns energy is not controlled by humans, nor was it even known to us in the past. However, the Sun’s energy can effect demand nonetheless—for example, ice cream might become more popular if the sun heats up.. Thus the sun is a counterexample to the claim that changes in demand are all the result of changes in supply.
You might claim that the change in (quantity of) ice cream demanded is actually the consequence of increased ice cream production. That is true in the sense that if no more ice cream was produced then no more ice cream would be purchased. But we can also ask what caused the company to choose to increase production, and the clear answer is that the company thought the demand for ice cream would increase as a consequence of the heat wave. If there was no anticipation of increased demand due to external reasons, the ice cream company would not increase production and thus would miss out on potential profit.
Just to make completely sure I understand you here… you went looking for something that’s not a natural resource underlying major economic issues, but could still affect those issues, and the best answer you could come up with was the sun ? The local star, that gigantic nuclear furnace whose radiant energy is the source of power for all photosynthetic life on earth, excepting maybe some geothermal-powered grow-lights in Greenland or something. That sun, that’s the one you’re referring to?
If solar energy flux abruptly changed by even one percent, up or down, or was widely anticipated to do so, i don’t think unemployed ice cream manufacturers and salespeople would be the main economic consequence, or even noticeable among all the other chaos.
Supply is defined as that which is produced by human beings, not that which is made of physical matter. Otherwise, saying that demand only responds to changes in supply would fail to constrain our expectations any more than the laws of physics do. But we’re pursuing a different level of analysis when we engage economic questions.
You are looking at aspects of my example that are irrelevant to my argument. My point is that human decisions and innovations are not the only factors behind changes in demand. Whether or not we restrict our analysis to the ice cream market alone, the point stands that demand would be changed if the Sun’s behavior changed and thus we need to look at things other than changes to supply if we want to accurately predict changes in demand.
Henry George was looking at the labor market, and pointing out that you can’t really understand the causes of large-scale unemployment, “the paralysis which produces dullness in all trades,” without looking all the way back up the supply chain, if necessary to natural resources and how they’re being used or prevented from use, until you find something necessary that’s not being supplied. Can you find a counterexample to THAT claim, a cause for general unemployment which can’t be traced back to a lack of supply?
If by necessary you mean “in demand”, then yes I agree, otherwise I don’t know what you mean. You need to look at what products have unmet demand if you think the market’s being prevented from reaching full employment. But examining supply chains from the ground up isn’t a requirement for this, and actually no one understands the economy that well as it’s computationally impossible. So we look at intermediate simplified components of the supply chain and at demand itself. There are times when looking at an extremely detailed picture is necessary, but I don’t think that’s always so.
Two exceptions to this:
Governments can employ people to do jobs that aren’t demanded by the market.
There might not be enough resources for people to do any work that’s in demand. For example, if I am a farmer in a developing country and foreign food imports are priced lower than what my costs are, I will probably not be a farmer for much longer.
If by necessary you mean “in demand”, then yes I agree, otherwise I don’t know what you mean. You need to look at what products have unmet demand if you think the market’s being prevented from reaching full employment. But examining supply chains from the ground up isn’t a requirement for this, and actually no one understands the economy that well as it’s computationally impossible. So we look at intermediate simplified components of the supply chain and at demand itself. There are times when looking at an extremely detailed picture is necessary, but I don’t think that’s always so.
Two exceptions to this:
Governments can employ people to do jobs that aren’t demanded by the market but help society.
There might not be enough resources for people to do any work that’s in demand. To look at a small example, if I am a farmer in a developing country and foreign food imports are priced lower than what my costs are, I will probably not be a farmer for much longer.
If by necessary you mean “in demand”, then yes I agree, otherwise I don’t know what you mean. You need to look at what products have unmet demand if you think the market’s being prevented from reaching full employment. But examining supply chains from the ground up isn’t a requirement for this, and actually no one understands the economy that well as it’s computationally impossible. So we look at intermediate simplified components of the supply chain and at demand itself. There are times when looking at an extremely detailed picture is necessary, but I don’t think that’s always so.
Two exceptions to this:
Governments can employ people to do jobs that aren’t demanded by the market but help society.
There might not be enough resources for people to do any work that’s in demand. For example, if I am a farmer in a developing country and foreign food imports are priced lower than what my costs are, I will probably not be a farmer for much longer.
Supply is defined as that which is produced by human beings, not that which is made of physical matter. Scarcity is the word referring to limitation of resources, not supply.
You’re intentionally looking at aspects of my example that are irrelevant to the point I was making. My point is that human decisions and innovations are not the only factors that change demand. Whether or not we restrict our analysis to the ice cream market alone, the point stands.