Sunday, August 5, 2018

Profit-Motive, Market Forces, Causality

Phrases such as 'Law of Supply and Demand' and 'market correction' signify a cluster of events.  Accordingly, the outcome of one event, e. g. a price paid, is a function of the outcomes of all the others in that cluster.  But, that raises the question of the efficacy of the intention of any participant in an event.  Now, according to Smith, and to most of his followers, that intention either is or should be the maximization of profit.  Lacking in that principle, however, is any causal connection between intention and outcome, or, more specifically, between intention and market forces.  So, a widely-held Theological principle fills that lacuna--that the forces are manifestations of a deity who rewards or punishes on the basis of an intention.  Otherwise, one's intention in any negotiation is irrelevant to its outcome, as is, therefore, the cardinal behavioral principle of Capitalism.

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