Competition and Coordination: The Invisible Hand
Microeconomics: Chapter 9
February 22, 2007
I. Introduction:
According to the text Understanding Capitalism, “markets provide a way for individuals and firms to organize some aspects of their interdependence; as they do this, markets coordinate the many complex activities that make up the economy, with no one in particular directing the process” (200). The topic discussed addresses coordination by rules, coordination by command, the invisible hand, and the dimensions of market failure.
II. Coordination:
Coordination refers to a horizontal dimension of economy. Rather, “a circulation of goods, services, and people is called the horizontal dimension because from this perspective things and people do not move ‘up’ or ‘down’ in the economy…they move ‘across’ from place to place” (200). This dimension allows the movement of things from one place to another, initiating self-sufficient individuals and......
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Approximate Word Count: 3198
Approximate Pages: 13 (260 words per double-spaced page) |