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Take a glimpse of the entire history of mankind. It turns out to be much poorer
than conventionally imagined. Millions of years have gone by since Darwins wellknown homosapiens began to learn how to speak and walk on foot and raised in its
ever-growing brain the ambition to be the supreme master of Nature; thousands of
years have passed since love, war and art were invented. However, changes only
started to take place no more than 100,000 years ago, and no more than 5-6 thousand
years for massive changes. Does this mean that millions years before that remain
almost in blank?
Alvin Tofler described the situation by dividing the latest 50,000 years of
mankinds history into 800 life-phases, 62 years each and commented: Only in the
latter 70 life phases could information be handed down from the former to the later
life-phase by the use of script. Only in the last 6 life-phases did they find printed
letters. Only in the last 2 life-phases could time be measure with precision. Only in
the last 2 life-phases did electric appliance exist. The majority of goods we are using
today have been developed during the 800th life-phase which is not yet completed?
Goods are products of market economy. What is market economy? It is a type
of economy that is adjusted by the market. Its prices is determined by the supply and
the demand relationship, by enterprises which have the right to freely decide what and
how to produce, who to sell the products in order to gained maximum profits.
Adam Smith (1723-1790), author of The Wealth of the Nations, is the first
to lay the foundations for the theory of free market (laissez-faire). Basic content of
this theory is as below:
a. Individuals and enterprises have rational attitudes to consume and produce.
They often seek for personal benefits and tend to maximize them.
b. Overall operation of the economy is ensured by an invisible hand which
arranges and combines actions of individuals. That hand is the organ that
realizes a natural command that represents market rules.
c. The market is the driving factor to adjust the economy. Supply and
demand, labor and capital will meet each other to achieve equilibrium
price: product prices, salary or rate of returns.
d. In markets, the exchange is implemented by means of money.
e. Lastly, according to the theory of the so-called neoclassicist, it should be
attached great importance of utility value and its impact on prices and
amount of goods. Besides, they also emphasize the theory of marginal
value, which specifically is the consequence caused by introducing an
additional unit into an available process.