Yeah, this would be part of the Keynes vs classical argument. Its a feedback, true. The problem with saying demand drives production is that, well, demand is basically infinite. Actual realized demand is thus much more determined by what the supply looks like, since the demand curve defines demand in relationship to a price. And what is one of the primary drivers of how sensitive people are to price? Their own personal ability to supply money, and thus their ability to supply things that can be purchased. Thus, supply drives demand. That not all supply is equal, and works on marginal utility, does not change which is the limiting and driving factor.
For example, if providing 10 horse shoes provided a blacksmith with $100 dollars of income ($10/shoe), the blacksmith's ability to consume is still limited if producing a 100 horseshoe would also only make a $100 dollars ($1 dollar per horsehoe). All that really suggests is that making a 100 horseshoes is not actually the best way for the blacksmith to maximize supply to his own use, and instead it makes more sense to supply $10 horseshoes and spend the rest of his effort supplying something else. Maybe outside of blacksmithing!
Thus, the primary determiner of what people are able to demand is how they are limited by their own ability to produce, though of course the value of their production is moderated by how demand sets the value of the production.
As in my example above, the family of 7 poor people in India want's to consume a lot more than they actually are able to do so. Obviously, what's limiting their consumption is not a limit on their demand, its the limit of their ability to provide goods to supply their demand.
As to economic illiteracy, economics is my wheel house. Mainstream economics is just unfortunately just as infiltrated and corrupted by Marxist nonsense as most other fields. Which, in normal Marxist fashion, often tends to say that wet roads cause rain.
Edit: plus, we do have to remember the context of why exactly china needs a growing population. Does China just need enough young people to fill critical domestic work needs, or does it need young people as a group to consume production. Young people being some sort of unique irreplaceable source of consumption just seems somewhat illogical to me. Consumption is much more connected to one's wealth, rather than "youth". The middle age chinese single man who is allowed to make $50,000 dollars of income from his work is more than capable of spending more than a current 25 year old Chinese man with 2 kids and a wife who only makes $20,000 dollars.
Peoples practical demand is much more tied to their income, which to a first approximation is driven by their productivity. After all, what meaningful thing is someone saying that a family of 7 poor Indians has a higher demand than Donald Trump by himself? Is there a way to say that for it to mean anything true or meaningful?
For example, if providing 10 horse shoes provided a blacksmith with $100 dollars of income ($10/shoe), the blacksmith's ability to consume is still limited if producing a 100 horseshoe would also only make a $100 dollars ($1 dollar per horsehoe). All that really suggests is that making a 100 horseshoes is not actually the best way for the blacksmith to maximize supply to his own use, and instead it makes more sense to supply $10 horseshoes and spend the rest of his effort supplying something else. Maybe outside of blacksmithing!
Thus, the primary determiner of what people are able to demand is how they are limited by their own ability to produce, though of course the value of their production is moderated by how demand sets the value of the production.
As in my example above, the family of 7 poor people in India want's to consume a lot more than they actually are able to do so. Obviously, what's limiting their consumption is not a limit on their demand, its the limit of their ability to provide goods to supply their demand.
As to economic illiteracy, economics is my wheel house. Mainstream economics is just unfortunately just as infiltrated and corrupted by Marxist nonsense as most other fields. Which, in normal Marxist fashion, often tends to say that wet roads cause rain.
Edit: plus, we do have to remember the context of why exactly china needs a growing population. Does China just need enough young people to fill critical domestic work needs, or does it need young people as a group to consume production. Young people being some sort of unique irreplaceable source of consumption just seems somewhat illogical to me. Consumption is much more connected to one's wealth, rather than "youth". The middle age chinese single man who is allowed to make $50,000 dollars of income from his work is more than capable of spending more than a current 25 year old Chinese man with 2 kids and a wife who only makes $20,000 dollars.
Peoples practical demand is much more tied to their income, which to a first approximation is driven by their productivity. After all, what meaningful thing is someone saying that a family of 7 poor Indians has a higher demand than Donald Trump by himself? Is there a way to say that for it to mean anything true or meaningful?
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