Fundamentals of Economics. Доловова Н.Н - 25 стр.

UptoLike

ВУЗ: 

УлГТУ | Ульяновск

Составители: 

Рубрика: 

25
25
countries worked on the premise that central planners in the government were in the
best position to guide economic activity. These planners decided what goods and
services were produced, how much was produced, and who produced and consumed
these goods and services. The theory behind central planning was that only the
government could organize economic activity in a way that promoted economic well-
being for the country as a whole.
Today, most countries that once had centrally planned economies have
abandoned this system and are trying to develop market economies. In a market
economy, the decisions of a central planner are replaced by the decisions of millions
of firms and households. Firms decide whom to hire and what to make.
Households decide which firms to work for and what to buy with their
inc omes.
These firms and households interact in the marketplace, where prices and self-interest
guide their decisions.
At first glance, the success of market economies is puzzling. It might seem as if
decentralized decision making by millions of self-interested households and firms
would result in chaos. Yet this is not the case. Market economies have proven
remarkably successful in organizing economic activity in a way that promotes general
economic well-being.
In his 1776 book The Wealth of Nations, economist Adam Smith made the
most famous observation in all of economics: Households and firms interacting in
markets act as if they are guided by an "invisible hand" that leads them to desirable
market outcomes. One of our goals in this book is to understand how this invisible
hand works its magic. As you study economics, you will learn that prices are the
instrument with which the invisible hand directs economic activity. Prices reflect
both the value of a good to society and the cost to society of making the good.
Because households and firms look at prices when deciding what to buy and sell,
they unknowingly take into account the social benefits and costs of their actions. As a
result, prices guide these individual decis ion makers to reach outcomes that, in many
cases, maximize the welfare of society as a whole.
There is an important c orollary to the skill of the inv is ib le hand in gu id ing
economic activity: When the government prevents prices from adjusting naturally to
supply and demand, it impedes the invisible hand's ability to coordinate the millions
of households and firms that make up the economy. This corollary explains why
taxes adversely affect the allocation of resources: Taxes distort prices and thus the
decisions of households and firms. It also explains the even greater harm caused by
policies that directly control prices, such as rent control. And it explains the failure of
communism. In communist countries, prices were not determined in the marketplace
but were dictated by central planners. These planners lacked the information that gets
reflected in prices when prices are free to respond to market forces. Central planners
failed because they tried to run the economy with one hand tied behind their backs—
the invisible hand of the marketplace.

Страницы