MARKETS
People's income should have nothing to do with what you produce. (Marxist View)
- Market transactions tend to produce positive outcomes.
- Markets are often "wrong".
- Institutions MATTER
- "Lack of Markets"
One of the goals of economic policy is "efficiency"
-We want to make sure economic system is producing what people want and at the lowest feasible cost.
You can't have market unless all of the other institutions in society are working correctly (institutions matter). There are generally accepted ways of how to act within a society. "Rule of Law" means that laws have to apply equally to EVERYONE. Laws should not be arbitrary.
If you get institutions "right" you can grow remarkably fast. Institutions are not rivalrous. No corruption, trust, good churches. All of this sparks good processes.
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