Chapter 1 in Bylund’s book, The Seen, The Unseen, and The Unrealized, discusses what the market is in relation to economics. His explanations about how the economy works really helped to understand the role entrepreneurs have in society. Bylund (2016, p.4) explains that the market economy is made up of exchanges of valuables. He explains that exchanges only happen when both parties find value in the objects they are trading for. I have never really thought about what makes the economy function, but when you think about it in simple terms like these, we only typically get something when we see value for it, mostly by buying it. In return, the other person generally receives money, which is of value to him or her. Later in this chapter, Bylund brings up the role of entrepreneurs in society. His quote,
Many disruptive technologies change people’s behavior not because they respond to an observed want expressed by consumers as an unmet demand, but because they solve a problem that many of us have long stopped considering as a solvable problem – or haven’t even thought of as a problem to begin with (Bylund, 2016, p. 10).
The use of the term “disruptive technology” really changes the perspective of what entrepreneurs do when they create new, innovative products. When something new comes to the market, people generally rush to be the first to use it. However, what happens to the product that it replaced? These products then get pushed aside, and for the most part, never get used again. The new products becoming “disruptive technology,” even if it changes the way we live for the better, is a unique way of addressing the ever-changing market economy. We exchange things of value that we find even more valuable. I found this chapter very insightful because it shows how we, as consumers, interact with entrepreneurs to affect how the market economy works through exchanges and new products.
Core to understanding the economy is recognizing that it is about human actions and interactions (Bylund, 2022, p. 15).
While we just discussed about how the economy is exchanges of value, Bylund furthers this with explaining how economics is about our interactions with one another. When we exchange something of value for something of value from someone else, we are creating the versatile economy. Bylund (2022, p. 16) explains this in terms of opportunity cost. Human actions build the economy because we must decide how we want to spend our time and resources, and what we do not choose is the tradeoff to what we did choose. We cannot have it all. We either can have one thing or the other, but never both at the same time. This is what creates value because we must choose what is more important to us when given multiple opportunities. Bylund (2022, p. 18) later says,
Value is never automatic.
The opportunities we choose not only come at a price, but they also come from a lot of work. Value doesn’t just appear from nothing. What makes something more valuable than others? I find this interesting to think about because what makes something more valuable to me than from someone else? This leads back to the exchanges we make because we all have different inputs on what is better than something else, which inclines us to trade each other for that resource. There is so much information that can be gathered from this chapter about how our actions and interactions create value in the economy, but the main thing to take away from it is that we must educate ourselves on how big of a role we play in running our economy.
This chapter by Bylund focuses on the importance of action for economic theory. Bylund (2022, p. 22) believes that the reason people act to achieve something is because they value the potential outcome. This is a good way to look at why we do what we do. It is human nature to not put forth effort unless we expect a good outcome. I think of this in terms of sports. We do not join a team knowing that we could get hurt and that we must put a lot of effort into it, but because we expect to win. To achieve something of value, we must work for it. However, we do not always do this as a team. Bylund explains this with,
We can also conclude that human action is in fact always individual action motivated by some personally valued end and taken toward that end (2022, p. 24).
When we work in a group, even if we believe that we are helping others, we are still doing it because we value the outcome. There is intrinsic motivation when acting towards something. It takes individuals to complete something worth value, even as a group effort. This is the economic theory, in which we use actions to achieve something for the outcome we desire.
In the last chapter, Bylund discusses the processes and productions used in the economy to create what we see day-to-day. Products do not just have a singular step before getting to the market; there are many different processes that occur when creating something new.
Together, these processes – often carried out by different businesses – make a very long chain of operations that step by step produces the specific good from the “original factors” that were available to us at the dawn of time: nature and labor power (Bylund, 2022, p. 43).
Sometimes, we do not think about the effort that is put into creating something. Because of this, we tend to take advantage of what we have and not appreciate the value of the good. This relates to the other chapters Bylund wrote because they all lead back to one thing: human action to create value. Bylund (2022, pp. 46-47) refers back to ‘The How of the Market’ in which he mentions “creative destruction,” which is similar to disruptive technology. Older products lead to new, more innovative products that change the way we live for the better. He ends this chapter with,
The consumer, in other words, is sovereign and, through buying and not buying, determines which entrepreneurs earn profits and which entrepreneurs suffer losses (Bylund, 2022, p. 49).
We are the people that control the economy, even if we believe that it is all up to the entrepreneurs and businesses that lead it. Consumers are responsible for telling whether a business is successful or not by if we buy the products. We determine what is popular by our actions to supporting specific businesses, and periodically changing products depending on our needs and wants.
I find this whole topic of economics to be really fascinating. Bylund explains it in terms that are easy to understand and connect to make a flowing argument about how we work together to create the market economy. By supporting what we find valuable and always working towards what we see is worthwhile, we are creating value in our own lives and helping entrepreneurs know what we want to see in the future.
Bylund, P. L. (2016). Chapter 1: The How of the Market. In Seen, the unseen, and the unrealized: How regulations affect our everyday lives (pp. 1–14). essay, Lexington Books.
Bylund, P. L. (2022). Chapter 1: What Economics Is. In How to Think About the Economy: A Primer (pp. 15–20). essay, Mises Institute.
Bylund, P. L. (2022). Chapter 2: Economic Theory. In How to Think About the Economy: A Primer (pp. 21–26). essay, Mises Institute.
Bylund, P. L. (2022). Chapter 4: A Process, Not a Factory. In How to Think About the Economy: A Primer (pp. 41–50). essay, Mises Institute.
