Chapter 1 – The Power of Markets: Who Feeds Paris A sound description of economics requires an outline of the troika: what to produce, how to produce it, and for whom to produce it. This troika will serve the analysis of both international and domestic trade, which Wheelan addresses further along in the text. Why is the troika a problem? Scarcity: a condition that exists when current resources are inadequate to provide for all the people’s wants. It is in the context of scarcity that these three questions become urgent. The market is the arbiter and answerer. There are competing theories of markets (pun intended) that answer the what, how, and for whom. Charles Wheelan, in this opening chapter/salvo, discusses the reasonableness of a price system, whereby price—the neon billboard—“dictates” the movements of goods and services. Price is a summary of market conditions. It informs both producers and consumers. Without this information, estimates of cost, of expected returns, of distribution, of budget, etc. are distorted. Allocation by price is contrasted against cronyism and a first-come-first-serve breadline. In the former, inefficiency is guaranteed (or your money kept). In the latter, inefficiency is also guaranteed. Inefficiency, as it is used here, is a euphemism for deprivation. Yes, the troika is a cruel mistress when mismanaged. A price allocative system, according to Wheelan, reaches nearest Pareto Efficiency. The Law of Supply and Demand is covered with an example; in this case, the offending example is a fish—a tuna fish. How is it that the amount and availability of tuna increase when demand for tuna increases? [Presumably, we’re talking about shifts, rather than movements]. The answer, again, is a free market predicated on price. How