Economic Loops

Market forces establish the market context of incentives and disincentives.

It should be clear that these incentives and disincentives result in actions.  Typically, the focus is on buy-actions, sell-actions, and investment-actions.

But this is a very small subset of the impact of the market context.

Indeed, any action that is influenced by the market context can be said to be an economic action.  The relationship between market context and action is statistical in nature.  There is ultimately a probability for a given action associated with a market context that can be seen to occur over a population affected by the market context.

These actions potentially impact the market context.  A government action for example can change a law which can then change the incentive or disincentive in place.  A boycott action or a strike-action can greatly impact supply or demand.  Further, it can create new incentives and disincentives based on its impact, its perceived cause, and its perceived solution.

In my view, the market context influencing actions which influence the market context is a continuous and dynamic loop.  

For me, the over focus on the exchange of goods looses perspective on this larger and very significant process.

Economics is not just about the distribution goods.  It is very much about the incentives and disincentives that greatly impact society.  It is about the shaping of perspectives, the spread of information, the harnessing of anger and frustration for political and economic gain, and sometimes, the exchange of ideas.

These economic loops, in my view, is the foundation of this dynamic with capitalism and markets as one of many examples.

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