At the center of the economist’s stage is the market in which two parties make an exchange because each prefers what he gets to what he gives in return. Yet market exchange is neither necessary nor sufficient for mutual gain. It is not necessary because innumerable exchanges occur without benefit of the market and because many unreciprocated acts also yield satisfaction to both giver and recipient. It is not sufficient because market exchanges often create not only satisfactions, but also the needs they satisfy, and anything that gives rise to both a need and its satisfaction is of little or no use to anyone. This chapter seeks to explore the traditionally erroneous principle that is basic to much of the economist’s work – that the higher one’s income, the more one can spend, and the more one spends, the most satisfied one should be.
