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Community ideas

Supply and demand in the market

Money - Seeing the future

English village

Imagine living in an English country village, surrounded by farms where all the fresh food comes from. You can go to the local farm market in the village and buy fresh food from lots of different farmers. You would probably shop around to get the cheapest meat and vegetables. You might eat whatever is in season and take advantage of availability and low prices. When there was a glut of apples, because of a good harvest. You would be able to buy lots to make chutney and apple pies.

Free markets

That’s the way free markets work, prices are determined by supply and demand. If the supply goes up, then prices fall in an attempt to stimulate demand. Some foods would be in plentiful supply and be staple foods, like potatoes and bread. Meat like rabbit and chicken would be cheaper than beef or pork.

Supply and demand

In the countryside people tend to use logs as fuel to cook, heat water and heat their homes. Even the price of logs is governed by supply and demand in a free market. However if just one person owned all the woodland then the price of logs might not be determined by supply and demand. He would have a monopoly. Local woodcutters could also get together to form a cartel to fix the price of logs.

The real wealth in this community is the food and fuel that is produced. They might be traded for money outside of the community allowing people to buy other goods from outside. They would also be skilled at crafts and make other useful things for people to buy.

Monopolies

If one person in the community owned all the woodland and could name his own price for logs or the woodcutters fixed the price of logs high; then they would get all the money and everyone else would suffer. Anyone getting rich by distorting the market in this community would make everyone else poor. We have seen this happen in British history when the poor simply served the aristocracy who fixed prices and exploited everyone.

Controlling the market

Imagine that in this hypothetical village, that the owner of the market charged high prices for people to trade there and charged high entrance fees for people to attend the market. The owner would have a monopoly and make lots of money. He could invest that in getting other monopolies, he could own the village bank, the village pub and the village newspaper.

How would you know that he was rich? He might flaunt it, travel in a luxury car, live in a mansion and become obsessed with his own importance. He would have power and the temptation to use that power. 

Parasites

British society is like that village and some people don’t produce food. They don’t cut logs, they simply work in the markets. They make fortunes off the backs of others; they are parasites. Other people work, other people teach, other people tend the sick, other people produce the real wealth. The market men, distort the economy, they own the market, they control the pubs, the entertainment, advertising and the sale of everything. The global economy is also controlled by the market men while they enjoy champagne and strawberries, some children don’t have a place to live or food to eat.

Bankers are now being investigated in many countries. Oil and gas producers are being investigated for fixing prices. The rich are being asked to pay their fair share of taxes. People are beginning to protest around the world. Are things beginning to change?

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