Important, and Often Overlooked, Aspects of Market Equilibrium

This paper considers an explicitly normative aspect of market equilibrium often overlooked in principles-level instruction: the notion that market equilibrium makes more people "better off"than market disequilibrium. Students are taught the similarities between market equilibrium and the equilibrium of physical science, but usually not the crucial differences. Unlike the equilibrium of a pendulum at rest, which is the result of physical forces acting upon it, market equilibrium is the result of individuals acting with purpose, in mutually beneficial cooperation. The result is that market participants can be said to make themselves "better off"in a way that finds no useful analogue in comparisons with physical equilibrium.