In industry, in finance, even in government people apply principles of supply and demand, production and consumption, leverage and compound interest with impunity. Nowhere are immutable laws, predictability and certainty more sought after and valued than in business and markets. Economists, academics, business consultants and financial gurus alike seek to refine hypotheses and develop ever more exacting language in an attempt to demystify the workings of supposedly rational free market systems. In their haste to definitively determine the path to fortune, the learned theorists overlook the most fundamental and significant aspect of money and markets - people. If we were to attempt to assess the worth of all items with economic value in this world, from people to resources to ideas we undoubtedly would arrive in the hundreds of trillions of dollars. The estimated value of everything, from real estate, to commodities, to personal, corporate, or government owned property, however, is not fixed. Values are in fact volatile expectations of worth. These expectations are held, not in a vault, not in a computer, not in a quarry, but in the minds of human beings. The value of all things are determined by the wants and needs, by the desires, of human beings. All values are set by needs, wants or desires. These needs, wants or desires constitute demand. Conversely, human beings provide the motivation, the knowledge, and the labor to meet all types of economic demands - wants, needs, desires. The energy of ideas combined by labor and often with natural resources act to satisfy the seemingly insatiable desires of an ever growing population. As no one is an island unto himself, people benefit from the time, energy and talent others apply to production, distribution and a myriad of other value added pursuits for sustenance and quality of life. People supply the products and services to satisfy wants and needs. The component elements of markets or whole economies for that matter, are: physical resources, labor, knowledge, ideas, and motivation. Economic pundits often focus erroneously on the tangible elements of the economic equation - physical resources and labor while it is the intangible elements - knowledge, ideas, and motivation - that matter. Physical resources are required to sustain living things. Nothing happens, however, for production, distribution, services or trade, without labor. Someone, or most often some group, must do something to produce or provide a product or service to meet a specific need or want. The dance of supply and demand is a vastly human undertaking. Beyond physical resources and labor, every human activity, every product or service developed or offered for trade is the result of the application of motivation, ideas, and knowledge. People are motivated to manipulate labor and physical resources into viable products and services for personal use or trade. The more knowledge and innovation people apply to create products or services or improve processes the more efficient and effective they can be supplying wants and needs and the greater their potential to profit. Human beings store value. With and within human beings reside knowledge, know-how, labor, motivation, and demand. These elements separately or when combined with physical resources determine the nature, intent and outcome of market activities. Human beings have monetary value. A monetary value that in aggregate, dwarfs the estimated value of all stuff. People need and want. To the degree they need and want, people determine value. People also create - they produce products and services to fulfill demand. People are the economic engine, the economic fuel, and the economic drivers determining both supply and demand. People make money, earn money, empower money. People are the makers and mistresses of markets. If you intend to amass a fortune, seek to understand and satisfy people, for they are the key to understanding money and markets. People make the money go round. Copyright (c) 2010 Scott F Paradis
Please Rate this Article 5 out of 54 out of 53 out of 52 out of 51 out of 5
Not yet Rated
