Stigler and the Economic Theory of Regulation - Essay Example

Individual Economic Paper: STIGLER AND THE ECONOMIC THEORY OF REGULATION Submitted By: Submitted Individual Economic Paper: STIGLER AND THE ECONOMIC THEORY OF REGULATION Introduction George Joseph Stigler is one of the many young economists of the early 1900's who gave birth to the recognition that human economy relies on the understanding and balance that several elements in the community standing as links between all systems that form the existence of worldwide economy exists to establish a stronger sense in the human understanding of monetary and services or products exchange. Through the derivation of the thought from trade systems during the early 1900's, economists such as Stigler were able to see through the situations and understand how supply and demand correlate with each other and how the consumer-producer relationship is formed to allow economic links occur between people and organizations in the society occur. The most known work of Stigler that affects many individuals and groups at present is that of the economic theory of regulation. This theoretical understanding of the major thoughts that has been created to help the society see through the situations mandated as part of the development of the human community creates a knowledgeable knowing on the part of the people's realization as to how they are playing an important role in the society. The economic theory of regulation basically shows how much people are affected by economy. The systems of the society and the rules that are established around the people living in it has long been derived from the many considerable thoughts of the ongoing relationship between social elements as per established through economic connections and demands. The relationship between every person and the groups that creates the entire society is shaped by needs and demands that each needs from the other. Through these demands, the creation of products and services are given way as per mandated through the different provisions allowed by the established legal regulations to exist. The theory of Stiglist suggests the strong implication as to how rules and regulations shape the society's capability of existing in the cause of creating balance among people and groups as established by each one's economic pursuits. In the discussion that follows, a careful understanding of the major issues concerned in understanding Stiglist's implicative theory on microeconomics naturally affect the author of this paper and how the entire idea affects the whole world basically shall be presented to the respective readers of this piece. Through this, the author aims to outline how much regulations of economy have naturally created rules and basic understanding on the roles of existence that each plays to benefit the others. ON Personal Views of the Economy As a regular individual, the author of this paper recognizes the real need to purchase things and get services that are necessary for life. Apparently, there are rules established for such needs and these rules are the ones greatly outlining the values that exist in the human society today. It is through these regulations that the birth of the many systems of economic operations are given way to control the ways by which consumers prefer to have the products that they ought to consume. It is through this that the regulations on how and when people buy what they need is established, and it is through this process that the monetary value of each service and product is identified as part of the demands of the human individuals given way as part of the fact that people and social groups exist for the survival of the other and vice versa. How does this idea affects the author personally Being an ordinary member of the society, the author is basically affected by the theory through becoming highly involved in the process of buying and appreciating products and services offered in the market through the scale of his monetary capability; a regulatory matter that is rather considered as a worldwide measuring tool that establishes the identification of a person's economic capability of being a part of the economic cycle. The preferences of the author on the services and products that he is willing to take part of are basically outlined through the help of one identifying factor, monetary capability. Of course, if the value of the product or the service he aims to have is not equally aligned with what he has in monetary terms may not be enjoyed by him at all. Hence, only those that fit the budget are the ones that the author himself could take part of. That is the rule that world economy establishes, an identifying tool that creates separation between people based on their capabilities of buying and getting the resources they need to leave. As personally seen by the author himself, it could not be denied that this regulation creates both a positive and negative effect on the ways by which the society intends to look at each elemental factor creating the entire community. Apparently, it is not that easy to withstand the regulation as everyone simply wants to. Through the measures of implicative progress in the economy, it could not be denied that there are those who simply cannot carry on with the changes; there are those who simply could not deal with the progress as it happens. Apparently not everyone is given the chance to take part in the every growing change that happens under the regulations of human economy. It is through this that the opinionated thoughts regarding how and why the regulation should be pushed through to assist human development and social progress had long been well debated upon. No, it is not easy to live with the regulations, but basically, these economic rules are the ones shaping the entire human society today. As based from the implicative thoughts of Stigler, everyone takes his own role in the economy. Business groups are among the most powerful elements that control those roles that each individual takes in the society. On the other hand, the people, the entire society of ordinary people define the existence of such business groups. With the demands that they establish, the business groups define their products and services. IT is only through this that the business groups are able to assure that they too would be able to get the best value that they deserve from the society that they ought to control. As it could be seen, Stigler's idea on the creation of regulations that bind the human relations based on the economic capabilities of each person and the economic role that each business organizations takes makes a great picture as to how the whole world relates to each other and how the survival of one country's economy depends well on the people and the willingness that they have to spend the money that they are earning. The microeconomics of social identification of the major roles that each one takes in establishing a community that is well regulated suggests the existence of need and the willingness to suffice the said needs and where certain individuals and groups in the society would like to take their own place. In this regard, it is then seriously recognized by the author of this paper that economic regulations are serious levels of identification among human individuals as to how much they are willing to take into consideration seeing the major regulations of economy established right within the society that they are trying to live in. Stigler and the American Economy Stigler's theory of regulation certainly makes it easier to explain how the American economy is pushed towards the developments that it takes today. Majority of the local economies in the present global market are experiencing difficulties and problems regarding their monetary and fiscal management and this is mainly because of many external factors such as political disruption and militaristic activities. This idea is also true even to the American's economic condition as. However, significant facts and data still describe the American economy to be strongly withstanding to the frugal conditions in the global market and still able to efficiently manage their economic resources. As viewed from an economic perspective, it can be said that most of the economic goals of the said society has still have not been achieved yet they are closer to its achievement at the present. Most of the previously proposed economic plans are being gradually implemented at the present and its effects are already being significantly felt in their local market. Also, the aspect of the America's national debt are still kept in balance amidst the implementation of the country's many economic activities eventhough current global market is very stiff. Economic growth and social development are still being fostered as the results of the national implementation of a more comprehensive and efficient fiscal policies regarding the input and output of the monetary resources in the local market. Thus, with these factors and their current condition, one can actually state that the America's present economy is very much growing and developing amidst the challenges in the global economy. The American society has always been perceive to be one of the strongest and most influential national economy in the global market and with their current state regarding their monetary and fiscal aspect, they have proven that they are indeed a strong economic entity. Their national economy has been able to show the world that with the implementation of an efficient and proper economic principle, national economy can actually withstand and prosper against the impending challenges of the global economy. Conclusion True, through the identification of roles that each person and each group in the human society takes, the establishment of a rather strong and well standing economy is perceived. Through the regulations of economy as Stigler himself explained, people take their places in the process of progress that the world economy today undergoes which is significantly functional for many. This particular truth shapes the values created by many people in the society, suggesting that as a part of the cycle that feeds the world economy towards progress, they should be given their fair share of the developments and the progressions that the entire economy makes. The cycle continues to exist and the people continues to exchange places every now and then, no matter what, what remains the same is the fact that economy continues to regulate relations and roles that human individuals tend to take. References: Diamond, Arthur M., Jr. (2005). "Measurement, Incentives, and Constraints in Stigler's Economics of Science." The European Journal of the History of Economic Thought 12, no. 4637-63. Freedman, Craig (2003). "Do Great Economists Make Great Teachers George Stigler as a Dissertation Supervisor," Journal of Economic Education,34(3), pp. 282-290 Read More