ABSTRACT
It may be useful to begin with a model of an economic system which is as alluring as it is unrealistic. Producers have to sell their goods to consumers in order to survive. They will only be able to sell to consumers what consumers want to buy. Consumer preference will dictate what is made available. Producers compete. Consumers choose. The ‘invisible hand’ of producers behaving in response to consumer preference organises the market. The survival instinct among producers which is instilled by the mechanism of competition will ensure an efficient allocation of resources. Given the stimulus of competition, resources will not be wasted. Production will stand in equilibrium with consumption. Viewed from this perspective, the market economy is a self-organising system.
