Hi everyone!

This is my first time writing in my blog in my birthday !

My name is David, working currently for the Kamalbe Spanish School,

we are a non profit organizatio where we believe in  the Culture Exchange

between Guatemala and the people around the world.

Everybory is welcome as a volunteer or student here in Guatemala.

Please take a look, www.kamalbeschool.org.

Thank you!

Honestly this time I don’t want to talk in mere academic language, today I just want to express a feeling I got when reading about Price Theory. That would be: Beauty. Not because its perfection nor because is liberal, just because point out something so coordinated and complex that happen in the very same world we live and we are part of. I mean the topics on gibbons or elephants in Africa are interesting, and the history of the XVII century can be as well as a Dickens novel, but in this case is something that we are part every day of our lives. I won’t explain my understanding of this, first because I think many of my colleges can do that in a clearer way than me, but mainly because the feeling of surprise and wonder is still so fresh in my mind. The fact that thousands, millions, actually uncountable actors in the process of fixing prices, each acting but at the same time being influenced by the rest without any central authority is so beautiful that I want to share this with you.    

Humanity searchs to satisfy multiple needs and in order to the, alternative tasks and applications of labor bloom. These solve through the price system which change constantly through supply and demand. This system of “supply and demand”. When people demand more of an article, the business supply or offer more. Then the price of the product rises, just as the products of those who make the article. This movement expands production and more people are atracted to what the business is doing.

But when there a lot of supply the price and the profit margin (which is the difference between the cost and selling price) reduces. So, if at the end of the day, if the profit margin reduces a lot it could not generate benefits at all.“The marginal producers which are the least efficient, or whose costs of production are highest, will be driven out of business alltogether”. Efficient producers who operate the lower costs are the ones who will keep their businesses.

Prices are not determined by the cost of the production, they are determined as mentioned before by supply and demand, the wants of the people and how much they offer for that product. It could cost a lot to cultivate and toast coffee in the Sahara, but how much do people want Sahara's coffee? How much are they willing to pay basing their price not only in Guatemalan coffee but in other terms such as quality and the time it lasts? So, what commodities has cost to produce in the past cannot determine its value. It depends in the “present” subjective values that people give to products. But also, business men need to make expectations based in price and how much product will be made, this “expectation” calls and estimation which tends to accommodate related to what people “want”. So this is how it goes: the more demand, the more profits. The more profits, more production. With more production (adding competence), the quality increases. This increases supply of that product but reduces the supply of other commodities. And when demand falls, the prices go lower and production declines.

Many have the issue if this does produces scarcity. They complain that the enterprises make production valid only under the dynamic of their profits. But it is neccesary not to produce a lot of just one product because there are other needs to be satisfied. Industries shrink and others rise, because production evolutes.

How the price system works

The Price system is in constantly changing interrelationships of costs of production, prices and profits.

Nowadays, prices are fixed trough the relationships or supply and demand. People tend to offer more when they want more, so the prices rise, because the people want it more.

This phenomenon also increases the profits of the ones who are making the article, because no it is more profitable than other articles. This increased supply then reduces the price and reduces the profit margin, until it once more falls to the general level of profits in other industries. Therefore, producers offer more for costumers and no vice versa.

This process is the origin of the belief that prices are determined by costs of production, but it’s not true. Prices are determined by supply and demand. Demand it’s determined by how intensely people want something.

·         Supply is determined by producers.

·         The more demand, the more profits. The more profits, the more production. And more production, the quality increases. This increases the supply of the product but reduce the supply of other commodities.

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1. 
   Based in what Dagny and Rearden discuss of value, why do people let things put value in things instead of viceversa? How does it happen?


2. 
   Wesley Mouch would give credit to certain  people who demostrated their neccesities and it actually considers these three questions: What was considered as a dempstration? What constitutes necessity? "Essential" for who? (Pag. 347 first Ed. Spanish)

The Birth of Value

Decisions are really important when we observe economically a situation, because in the time of choosing, the option preferred is accountable. Those decisions are based in value, being those under principles, situation, environment, and others. Having some end in mind, and limited means by which someone mught achieve those ends. Almost always we have limited access to resources , and under that situation we might choose what use we will do of that resources, and every kind of use is valid, but which is the necessary? Is it the one I want? What else can I consider? What satisfies me? Those characteristics also conform our procedure of choosing therefore we calificate a value.

Utility is valued, and when more limited and necessary these resources are, they are more taken care of. Like the example given in the text, having a lot of barrels of water will give Rich the chance to spend it in less “important” (under his values) events, which of course, Rich chooses. All of these attempts are actions, which are what economics study, embracing humanity which everyday finds itself making decisions, facing an uncertain future.

Rethinking the Social Responsibility of Business

A response to John Mackey and Milton Friedman's articles.

Humans certainly are social beings, they cooperate indirectly or directly with each other, either this interaction coming from philanthropy or simply by increasing individual profits. Capitalism is branded with series of pure selfish and greedy opinions because a lot of people think capitalist businesses just want to keep the money for themselves and not contribute to the growing of society. That is maybe because they just see the supperficial work of an enterprise and don't actually understand that the effort invested within the business will benefit the customers, employees, community, vendors and investors. All of the first are who valuate the service or product of the business, so it depends on society to maximize its profits.

John Mackie exposes how he does not take his business' purpose to maximize the shareholder's profits but to first benefit the customer. This means to an end a maximizing on profits. I think is good looking to the business like that, validating each perspective of value and following its dynamic. I'd like to mention a quote John Nash said: "The Best for the Group comes when everyone in the group does what's best for himself AND the group”. I think the work the invisible hand does is really effective, but why not voluntarily under our own judgement and responsibility accomplish and “invest” on society in order to make it better? It's just a matter of choosing some field we know we can help without making others dependent and knowing it will give something back, maybe not for ourselves but to the whole society we live in. Because as Mackey said, human nature isn't just about self interest; it also includes sympathy, empathy, friendship, love and the desire of social approval.

El 21 de julio es la celebración por los 100 años de fundación de la república de China – Taiwan – en Guatemala.  Tenemos una invitación al evento, si alguno de los miembros de la incubadora quiere asistir, favor avisar a incubadora@tec.com.gt

Noticia completa:  http://www.prensalibre.com/internacionales/segunda-vida_0_518948145.html

Agenda de e-reciclaje del Campus Tec con:

http://www.ewastedeguatemala.org/home.html

Noticia completa:
http://noticias.ufm.edu/index.php?title=Orihuela%3A_La_tecnolog%C3%ADa_transforma_la_cultura

Sitio:
http://www.ibge.gov.br/paisesat/main.php

Invitación e inscripcion:

http://intecap.edu.gt/index.php?option=com_k2&view=item&layout=item&id=86&Itemid=176

Ayer se llevo a cabo el evento en el Centro Tics y estuvieron presentes por parte del Campus Tec, Ricardo Burbano y Gabriel Miron.  Felicitaciones a los señores de Sourcefabric y favor ver:

http://lanyrd.com/2011/sflatam/

Para que colaboremos!!  Favor ver:

http://www.funsepa.org/eduk

Revista Digital de ISO