Economics: what is Supply and Demand?

What reasoning used in not listening tothe demand side of supply and demand economics? Doesn't EVERY company not listen to demand anymore?

• Answer:

  Say said that "supply creates its own demand" (and Reagan agreed; Bush Jr. didn't attend that class and got the answers to the test from his dad's friends). Keynes said "when demand is low, the government should build more roads" (and FDR, Clinton, and Obama agreed). They're both right, to a point. In an affluent society, it doesn't really matter what people think they want (demand). What matters most is how good the producers are at manufacturing need for the stuff they've decided to make -- mostly through advertising. (If you don't think that advertising works, consider how much of your daily bandwidth is advertising, and the valuation of business plans -- Facebook; Google; Yahoo; NBC -- that rely on ad revenue. The people that spend that money are very rational, and they have the best psychological research in the world to support their decisions. The shit works.) Maslow said all that people really want is to eat, sleep out of the rain, and fuck. After that, we should learn to shoot a gun, read books, and spend time with family -- which is hardly the recipe for building a big, industrialized country; but it could be a very nice place to live. All other material needs have to be manufactured by ad men, and therefore don't make us happier (but do give us employment, to a point). In their pursuit of profits, companies will tend to import stuff made in cheaper countries. Adam Smith said that this is good, but I'm not so sure. I think that comparitive advantage is a lie, and that we'd be much better off putting our heads together and figuring out how to be happy with the stuff we've got, and export some of the excess happiness that we create in the process. Abe Lincoln (history's smartest Republican) said "I don't know much about economics, but it seems to me that if you import, you get the goods, but not the money. If you export, you get the money, but not the goods. If you buy your own, you get the goods AND the money."