What are Markets?

Most people are confused as to what a market is.  They see it either as a place one goes to buy stuff (e.g. a mall or bazaar) or as Wall Street.  While both certainly are kinds of markets, they are not the only kinds.

Simply put, a market is just the term we use to describe the exchange of goods/services/ideas between two or more people.  That’s it.  The stock market is a market as people buy and sell shares of companies, but we also have a market when two schoolkids trade baseball cards.  In fact, the Internet is full of markets: Craigslist, eBay, Amazon, forums, WordPress, etc etc etc.

Markets allow for the co-ordination of buyers and sellers.  In this manner, they allow goods/services/ideas to go to where they are most valued.  Therefore, both parties in a market benefit as each one obtains an item s/he values more than what s/he trades away.  Thus, wealth is created.

It really is this simple.

A Force for Good

I am attracted to economics because of its ability to do good.  Economics is, first and foremost, the study of human interaction.  It looks at how humans exchange and interact with each other and how we can best help one another.

Economics in general, and markets in particular, are a major force for good in the world.  No system as yet devised by Man has achieved the level of success markets have in reducing poverty, hunger, death, disease, violence, pollution, and other evils that afflict us.  Through the course of this blog, I’ll be throwing a lot of statistics and charts your way, dear readers, that focus on the good that is happening worldwide, but I want to start with one in particular: since I was born in 1989, the number of people living in absolute poverty worldwide has halved.  That has never happened before in all of human history.  I believe this has a lot to do with the liberalization of markets globally that occurred in the 1980’s.  I’ll avoid the long-winded speech, but consider this a taste of what is to come.

Dear readers, I hope to explore means of helping the less fortunate through the power of economics on this blog.  That will mean not only talking globally but locally as well.  I’ll explore policies and proposals and analyze their ability to help those in need.

I hope this will be the first in a long line of blog posts.  I look forward to sharing my ideas, thoughts, and ramblings with you as we journey to, what I hope will be, a brave new world.