[...]... is the other worthy of entering into business with?) otherwise the ‘price’ agreed upon will be all the higher to compensate for the increased risk involved If the buyer distrusts the seller then the latter will have to pay the ‘price’ of no deal or gaining less cash than he bargained for If the seller distrusts the buyer or his currency then he will charge all the more Better for both parties if they... market place the customer has paid for the social interaction as well as the product The economic reason for the differences described here relate to the nature of institutional support for the markets in question In the second case, much time and effort is devoted to CLIENTISATION: the process by which the two parties become known to one another and their credibility established Without the back up... planners dictated © 2004 Tony Cleaver Private ownership of land, profit-maximising behaviour and the ability of entrepreneurs to employ labour and determine the working lives of others was prohibited The state directed the objectives of the collective farms/communes, gave the orders as to who was working where and with whom and restricted the freedom of individuals to do otherwise While this may seem... depression, the division of the world into opposing camps of capitalism and communism, increasing wealth of a capitalist minority and finally the eventual collapse of the centrally planned, command economies behind the ‘iron curtain’ The process of evolution in the decision-making systems that society has invented must inevitably continue And as some systems become extinct so others replace them In the new... Very little remains today There is no native, unspoilt natural vegetation left in Western Europe that has remained unexploited by man Gone too are the bears, wild boar and a host of other species that used to run wild in the forests But the trees felled in the past built the ships that first circumnavigated the globe, founded the trade and provided the energy that produced the modern industrial age... replaced the animal population that preceded it It is in the nature of economics that sacrifices must be made The issue therefore becomes one of being as efficient and equitable as possible Keep the opportunity cost of economic development to a minimum so we do not have to trade-off too much of one to gain more of the other The European lion may be extinct though we might yet find ways to protect the Asian... hands over a plastic card to effect a transfer of money from the consumer’s bank account to that of the store The buyer signs the © 2004 Tony Cleaver till receipt, picks up the packaged item and leaves the store Sale concluded In another culture the process may be very different The consumer enters the bazaar and is confronted with a wealth of colourful alternatives, none of which appear standard After... little control over their destinies and so the only remaining ‘tradition’ which dictates what occupations poor people follow, what goods they produce and how they produce them is the continuing tradition of economic powerlessness Their choices today are in fact more limited than in the past, thanks to the institutions that have overturned earlier social custom and have re-shaped their society Source:... buy hospital time and resources that could otherwise be used to treat penniless carcrash victims It does mean, however, that getting the money to pay for the latest in high tech medical research means continually bargaining for government handouts © 2004 Tony Cleaver Whatever the criticisms about the monolithic nature of the state-run NHS, however, the over-riding objective of this planned system has... 2004 Tony Cleaver 2 PRICES, MARKETS AND COFFEE Durham Cathedral soars above the centre of the old British market town as it has done for almost a thousand years But just down the road from the Norman cathedral and the castle that defends it, a new coffee shop has recently opened Amongst the cluster of shops and stalls which crowd Durham’s market place, this newcomer has now opened its doors to tempt the . FIGURES IN MANAGEMENT MORGEN WITZEL INTERNET: THE BASICS JASON WHITTAKER © 2004 Tony Cleaver ECONOMICS THE BASICS Tony Cleaver © 2004 Tony Cleaver © 2004 Tony Cleaver First published 2004 by Routledge 2. from the British Library Library of Congress Cataloging in Publication Data Cleaver, Tony, 1947– Economics: the basics / Tony Cleaver. p. cm. – (The basics) 1. Economics. I. Title. II. Series: Basics. www.eBookstore.tandf.co.uk.” ISBN 0-2 0 3-4 960 2-7 Master e-book ISBN ISBN 0-2 0 3-5 732 7-7 (Adobe eReader Format) PARA MARIA CRISTINA © 2004 Tony Cleaver CONTENTS 1 Wealth and poverty 2 Prices, markets and coffee 3 The business