---
entity_slug: effectual_demand
evaluator: null
evaluated_at: '2026-02-23T05:22:40.826598'
overall_score: 4.4
scores:
- name: definition_precision
  value: 4.0
  max_value: 5.0
  rationale: The definition clearly distinguishes effectual demand from mere desire
    by emphasizing both willingness and ability to pay the full costs of production.
    The contrast with "absolute demand" and the coach example provide concrete boundaries
    for this concept.
- name: source_grounding
  value: 5.0
  max_value: 5.0
  rationale: This concept is directly from Smith's text in Book I, Chapter 7, where
    he explicitly contrasts effectual demand with absolute demand using the poor man
    and coach example. The terminology and conceptual distinction are authentically
    Smithian.
- name: domain_placement
  value: 5.0
  max_value: 5.0
  rationale: '"Exchange" is the correct domain placement since effectual demand is
    fundamentally about market transactions and the conditions under which exchanges
    actually occur. This concept sits at the heart of Smith''s market mechanism analysis.'
- name: vsm_relevance
  value: 3.0
  max_value: 5.0
  rationale: Effectual demand has some relevance to S4 (intelligence/environmental
    adaptation) as it represents market information about viable demand conditions,
    but it's primarily a market-level concept that doesn't map cleanly to organizational
    cybernetic functions. It's more VSM-neutral than clearly assignable.
- name: explanatory_value
  value: 5.0
  max_value: 5.0
  rationale: This concept provides crucial explanatory power for understanding how
    market prices are determined and why some potential demands don't translate into
    actual market activity. It illuminates the fundamental mechanism distinguishing
    effective market signals from mere wants.
---

# Evaluation: Effectual Demand

## definition_precision — 4.0 / 5.0

The definition clearly distinguishes effectual demand from mere desire by emphasizing both willingness and ability to pay the full costs of production. The contrast with "absolute demand" and the coach example provide concrete boundaries for this concept.

## source_grounding — 5.0 / 5.0

This concept is directly from Smith's text in Book I, Chapter 7, where he explicitly contrasts effectual demand with absolute demand using the poor man and coach example. The terminology and conceptual distinction are authentically Smithian.

## domain_placement — 5.0 / 5.0

"Exchange" is the correct domain placement since effectual demand is fundamentally about market transactions and the conditions under which exchanges actually occur. This concept sits at the heart of Smith's market mechanism analysis.

## vsm_relevance — 3.0 / 5.0

Effectual demand has some relevance to S4 (intelligence/environmental adaptation) as it represents market information about viable demand conditions, but it's primarily a market-level concept that doesn't map cleanly to organizational cybernetic functions. It's more VSM-neutral than clearly assignable.

## explanatory_value — 5.0 / 5.0

This concept provides crucial explanatory power for understanding how market prices are determined and why some potential demands don't translate into actual market activity. It illuminates the fundamental mechanism distinguishing effective market signals from mere wants.