Compendium: Supply and Demand

Where there is any conception of Currency, there is a Command and Control (C2) Mechanism facilitating it. And where there is any C2 Mechanism, there is a Unity of Commands with a corresponding Unity of Efforts. Liberal Capitalism itself has its conception of Currency as “Kapital” and its C2 Mechanism as the “Incentive.” To issue Kapital to somebody is to issue them a command as Incentives of a Unity of Effort as “Supply” and a Unity of Command as “Demand.”

The term “Supply and Demand” refers to the way in which Kapital and Incentives affect the Values of commodities, goods and services according to the “Use-Value” and “Exchange-Value” as part of determining their “Unit-Prices.” Every Use-Value is ‘stimulated’ by its Marginal Utility by trying to offer the most pleasure for the least pain, the most Kapital for the least amount of effort. Every Exchange-Value is ‘stimulated’ by the Availability of goods and services in existence based on their overall Quantity and the Frequency at which they can be bought and sold for a listed Unit-Price. In competitive and functional Market/Mixed Economy, privatized commercial firms constitute as ‘market forces’ driving the production of goods and services for profits measured in terms of Kapital Accumulation. The goal of market forces is to facilitate the possibility of an Equilibrium between the Unity of Efforts behind Supply and the Unity of Commands behind Demand based on their Incentives and the Kapital ultimately driving them.    

Under Liberal Capitalism and its Market/Mixed Economy, Prices are always in constant flux due to different ideological factors. It is ‘ideological’ insofar as the factors themselves are dependent on the preceding premise that every Individual is inwardly unfree and inwardly insecure by nature and thus can only be outwardly free and outwardly secure through their government under a social contract with civil society. True freedom and true security do not exist under Liberal Capitalism. “Uncertainty” arises not from whether the information from the economy is factually accurate, but the fact that any Individual being inwardly unfree and inwardly insecure will never know what they really need or want in Life. That is why Liberal Capitalism deems the outward freedom as “political and economic freedoms” and outward securities as “political and economic securities.” Every Market/Mixed Economy creates more Taxes, more Regulations, more Social Welfare and Pension payments, more consumer and government spending, more budgetary deficits and eventually more Schuld (Debt/Schuld) through Kapital Accumulation.   

It is through the process of Kapital Accumulation within the Market/Mixed Economy that we encounter those factors. The “Comparative Advantage” causes certain goods and services to achieve a greater Demand by being priced lower and tempered by a greater Supply. There are “Opportunity Costs” that affect whenever somebody decides on one choice over a multitude of other choices, “Marginal Costs” that affect wherever somebody decides to produce more of the same thing, and “Deadweight Losses” that arise from trying to achieve an Equilibrium between Supply and Demand. Additionally, there are those among us who have certain “Preferences” that may not necessarily be their own insofar as they originated from repeated exposure to Liberal Capitalist propaganda masquerading as ‘advertisements’.        

Certain reforms implemented within the framework of Liberal Capitalism do not always bode well. One example includes “Price Controls” that essentially freeze a given Unit-Price by given floor and ceiling, incognizant of the Incentives of Supply and Demand. This is how shortages occur because Price Controls do not take into account any changes of economic conditions and people are will not always know why the Unit-Price of anything would keep rising. Something similar tends to occur in the context of “Rent Controls,” which rises as the consequence of gradual increases in monthly rents under Liberal Capitalism. Most people are not going to be aware of factors beyond their control such as land speculation within real estate, interest rates set by the central bank, or the amount of Kapital one borrows in the mortgage to purchase their own home.      

The moment one realizes how Incentives of Supply and Demand is also the moment when one also becomes acutely aware of ideological language like “Wealth Inequality,” “Oversupply,” and “Underconsumption.” Wealth Inequality occurs among people ‘living paycheck to paycheck’ and demanding that the people wealthier than them should pay more taxes than they do. The idea functions more like a self-correction of market forces insofar as the aim is to achieve some semblance of Equilibrium by agitating for ‘Wealth Equality’. Conversely, any instances of Oversupply (Supply not in sync with Demand) or Underconsumption (Demand not in sync with Supply) will cause the Unit-Price to fall and vice versa for their opposites.   

A similar variation of this involves the concept of “Wage Controls,” where the amount of Kapital allocated to a Minimum Wage for instance is either cognizant or incognizant of the Incentives of Supply and Demand. It becomes inevitable within Market/Mixed Economies to expect employees to agitate for a higher Minimum Wage and for employers to agitate for a lower Minimum Wage. Obviously, what is being conveyed here is that the employers shall pay their employees more from the Kapital Accumulation that may not always come from the economic activities of both. It is more likely to expect the employers and employees of their firm to be receiving some of the Kapital from the loans they receive from the banks, the investments from investors at a financial market, or the tax cut from the Parliamentary Democracy of a Liberal Capitalist regime.

There is a very good reason why, when somebody advocates for Socialism in America and the broader Western world, the first question to be expected “Where will you find the Kapital to pay for it?” One does not answer that question with either or a combination of “more taxes,” “more spending,” “more welfare handouts and pensions,” and more of the same that already occurs under Liberal Capitalism. One does not begin their advocacy for Socialism by trying to exist within the framework of Kapital and the Schuld that it naturally creates based on the Incentives of Supply and Demand. Any advocacy of Socialism must be the advocacy of a different way of economic life with its own corresponding political and social ways of living under its economic order.     



Categories: Compendium

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