Market Economies- Invisible Hand is the Best Way to Determine Supply and Demand

Supply and Demand form vital parts of an economic system, and if not determined properly can cause for extreme over or under production of products, a fact that governments of any nation must take into account, whether in real life or the game. Almost everyone knows the basic idea of supply and demand, including the inverse relationship between the two factors, but very few realize the extreme importance of it within a society. Historically, those rulers who attempted to control the supply and demand within an economy were usually unsuccessful and caused dramatic starvation and lack of goods. However, a market economy, uncontrolled by the government or only with necessary restrictions, seems to be the best means of producing the right amount of goods because everyone involved benefits from the system. Likewise, the sooner that a market economy can be established in Civilization IV the better, usually enhancing both production and gold supply while increasing the happiness of the people.

Historically, and even today, supply and demand are important factors that must be properly balanced in order to assure the economic success of a nation. Supply is defined as "a schedule of quantities a seller is willing to sell per unit of time at various prices, other things constant," while demand is defined as "a schedule of quantities of a good that wil be bought per unit of time at various prices, other things constant." (Colander) When these two things are in corespondance with one another it is known as equilibrium. All nations are working towards equilibrium price and quantity, which basically say that supply and demand are equal to one another and there is no excess or shortage within a nation, defining a perfect economy. Although this ideal is nearly impossible, the closest any nation has come to achieving it is through a market economy and the idea of Adam Smith's invisible hand. Therefore, a market economy is the best way that a ruler of a nation can assure at least partial economic success and it is smart for this to be applied as quickly as possible within a nation.

Likewise, applying a market economy as soon as possible within the game will help a nation achieve the best economic success. As soon as this system is applicable I advise that any gamer choose it as the means for the society because it will allow for the best production and success. It also increases gold supply and happiness of those living within the society. If this is applied trade will prosper and almost every aspect of the nation will improve. It is much easier to allow an invisible hand to determine supply and demand than attempting to do it yourself, a commonly proven fact in nations using socialism or communism.

In conclusion, supply and demand can be best determined within a market economy using an invisible hand. Applying this both in real life and within the game will help to increase success both economically and socially. It allows for competition that results in benefits for both the consumer and the producer within the society. In addition, this competition leads to a better product that will increase trade and make american products more desirable. I believe that market economies are the only logical and successful way to control supply and demand within a society.