“Lets remember what a market is. A market is not what is taught in the university; it’s not about supply and demand. Markets do not supply what people demand. They supply what people can afford. That’s a very different thing. We could easily right now come up with the demands we think a society like ours has for goods and services to be produced, but that’s not what is being produced and is not what will be produced. What’s produced is where the money is…over the last 30 years the one percent at the top have gotten twice as much income, that means that twice as many goods and services are going to be used to supply the demand of that one percent, and the other 99 percent will get less of what they need and want…that’s what the market does, it validates and reinforces the distribution of income.”

The above passage is a transcribed quote from a talk by economist Richard Wolff. I think the way Wolff explains this is really helpful because it seems like a lot people get confused when advocates of neoclassical economics start talking about supply and demand and attempt to minimize and/or sweep under the rug the obvious inequities of unbridled free-market capitalist systems.

Tags:capitalismeconomicsfree marketsRichard Wolffsupply and demand