 |
| |
|
|
Agathon
|
 |
Leafs 4TW!! - CPA
Dec 2002
time: 00:37
|
|
quote:
What maximum? What shortage? I want to make hats, I start a shop and make hats. I charge what I need to charge. Nothing about that is going to result in the great hat shortage of '05. |
OK. You start a shop and make hats. How much do you charge for your hats? If you want to sell them, you will have to charge the same or lower than your competition, or you will end up with unsold hats. If you just charge as much as you need and everyone else does, then what incentive is there for people to invest in hat factories when they can get a higher return elsewhere? If everyone starts selling below the price the market will bear, people will fund other things than hat factories and there will be a hat shortage.
quote:
A crisis with government intervention is a really sad excuse for an argument about markets. I'm sorry, but there's no other way to say it. |
The example is quite generalizable. Let's take the hats example again. Let's say that the Quebec hatmakers' guild decides to standardize prices at a 10% markup from cost. But how do we know that you will make the right amount of hats - the amount people that people are prepared to pay for? If you keep the price fixed, you will probably end up with a hat shortage (if they are too cheap and people buy lots) or a glut of hats (if they are too expensive and people buy fewer hats). The price mechanism operates to keep supply and demand in synch. A high sale price (vs. cost price) for hats is a sign to would be hat makers to get into the business - it's a sign that not enough hats are being made.
Without the price mechanism you end up with inefficiencies - either productive resources are wasted on making too many hats which people don't want or it is wasted on other things when it should have been used to make hats.
This is first year economics NYE. The fact that I, a raving communist, am having to inform you about why capitalist markets work, is an irony rarely seen on Apolyton.
quote:
You obviously haven't heard of the back biting families that some of my acquaintances come from. Although, I'd like to agree with you. I come from an very large extended family that behaves more like you describe. However, from what I know from my friends, it is the exception and not the rule. |
Being able to behave badly towards your family members is a sign of the economic independence that the market system has brought people. In a traditional society, behaving that way would have been life threatening to its members.
|
|
| |
|
|
|
Darkstar
|
 |
Huntsville, AL, USA
May 1999
time: 23:37
|
|
quote:
Originally posted by St Leo
quote:
Originally posted by Darkstar
And throughout most of history, the heart of society's moral code has not been "altruistic". It's been "Shut up, stay in your place, and do what you are told." From your statements, you are not very familar with many societies. Feel free to actually go read a bit about the ancient cultures. We know about the teachings and morality of most cultures that lasted for several generations at least since ancient Egypt. |
There's a lot more prehistory to go around than there is history. |
The trick, St. Leo, is that societies codes haven't changed significantly since the first stable human societies. What works, works. We see the same values, over and over. And they are:
* Shut up.
* Stay in your place.
* Do as your are told.
If you could observe the first stable human societies, you'd find they teach and believe in those things. And the beings that came before Modern humans would also be along the same lines. Heck, all of our genetic kindred (the primates) all hold the same basic social behaviors.
Welcome to the jungle...
|
|
| |
|
| |
|
|
|
OzzyKP
|
 |
Rockville, MD
Oct 1999
time: 00:37
|
|
quote:
Originally posted by Urban Ranger
About what you are talking?
That money is supposedly sitting in a bank, not loaned out to many other people by the CEO*. The bank may lend that money to other people, but it has absolutely no bearing on St. Leo's scenario, which is an illustration of consumers not having much say in how "the market" work. |
Money never just sits in the bank. If you've got a checking account with $200 bucks in it, the bank doesn't have a drawer with your name on it where that $200 resides. To say that the bank loaned out the money doesn't violate St. Leo's scenario, because St. Leo's scenario was a cynical/misinformed version of reality. In all banks, at all times, that money is doing good by being loaned to others.
As long as the example is going to feature a bank, than I'm gonna explain how the bank works. If you say the money was just sitting under the matress, then yes, the money is doing no good. But CEOs don't stuff millions of dollars under their bed. hehe.
quote:
Wrong. Having an excess means the allocation is messed up, because there is going to be a shortage somewhere. Alternatively, an excess means waste. Take your pick. |
There isn't a finite amount of wealth/money in the world. It grows, changes, contracts all the time. I am once again amazed by how inept commies are at basic economics.
|
|
| |
|
|
|
OzzyKP
|
|
Rockville, MD
Oct 1999
time: 00:37
|
|
As for the altuism thing, Agathon is right. People are naturally altuistic. We can get into an argument about how that arose, but its true. People are generous, compassionate, thoughtful, cooperative etc. Not just in ancient history, but today.
As Agathon noted, within tribes, life was often communal and people behaved altuistically toward each other. To a degree at least (we can quibble over the details of prehistoric life).
It must also be noted that on a macro or inter-tribe level, people became incredibly competitive, selfish, aggresive and hostile.
Both cooperation and competition are natural. Both existed in prehistory, both exist now.
So if Agathon's main point is that altuism is natural, I absolutely agree.
|
|
| |
|
|
|
OzzyKP
|
|
Rockville, MD
Oct 1999
time: 00:37
|
|
One additional point though, to extrapolate. If compassion, altuism, and cooperation are natural human traits that have been with us since prehistory, as both Agathon and I contend, then that would seem to bolster, not diminish the argument for a free market system.
There will always exist a need for society to help out the less fortunate. Except to some hardnosed Ayn Rand fans, and those who praise the free market as a kind of social darwinism, this is an accepted premise.
The point of contention is whether individuals working alone or in private groups (non-profits, churches, etc) can be trusted to help out the less fortunate, or whether government needs to step in to do it. Socialists seem to argue that people are too selfish (ironically) to take care of their fellow man, and need the government to force it on them.
But if we accept the assertion that humans are naturally altuistic, compassionate, etc, then we can be confident that if given the opportunity, private interests would fill the vacuum were government to abandon social services. Churches, charities, non-profits would step up to the plate and provide all the essential services (and yes they are essential) that government now provides.
That's what I figure anyways.
|
|
| |
|
|
|
St Leo
|
 |
Member of the Apolyton Social Democratic Party
Jul 2005
time: 00:37
|
|
quote:
Originally posted by OzzyKP
But if we accept the assertion that humans are naturally altuistic, compassionate, etc, then we can be confident that if given the opportunity, private interests would fill the vacuum were government to abandon social services. Churches, charities, non-profits would step up to the plate and provide all the essential services (and yes they are essential) that government now provides. |
That they would. Unfortunately, the little fish don't have the resources to maintain the same level of universal accessibility a government can. They are also much more likely to be biased in favour of some minority.
Government is a tool. The whole reason Americans and French had their revolutions was so that the government would be a tool for good, not evil.
Because it represents all of us -- it gets its mandate from the vote each of us casts -- it can serve all of us. Much like Google's philosophy is "Don't Be Evil", Canada's philosophy is that of "Good Government". Our government sometimes fails us -- observer the Arar tragedy -- but mostly it manages to do good.
As the preamble to the German Constitution says, "The dignity of humanity is inviolate. To respect and protect this dignity is the duty of all government power."
|
|
| |
|
|
|
SnowFire
|
 |
New York City, NY
Jan 1970
time: 00:37
|
|
OK. You start a shop and make hats. How much do you charge for your hats? If you want to sell them, you will have to charge the same or lower than your competition, or you will end up with unsold hats. If you just charge as much as you need and everyone else does, then what incentive is there for people to invest in hat factories when they can get a higher return elsewhere? If everyone starts selling below the price the market will bear, people will fund other things than hat factories and there will be a hat shortage.
This... is... bizarre. How are you stating the facts, and then not getting them?
If I had time, I'd go draw a simple supply & demand curve in MS Paint or something. But you have the gist of it. We all know that the market clearing price is where the supply curves and the demand curves intersect- the same amount of product is supplied as is sold. So what if the price is set too low, for whatever reason? Not enough suppliers are interested- it's too low on the supply curve- and there's an excess of buyers. So, there's a shortage, and buyers start bidding each other up to compete over the few products being sold. Thus, the price starts rising.
If the reverse is true, the price is too high, too many people are supplying, the warehouses start filling up, and not enough people are buying. Thus producers start scaling back production or going out of business, there's less supply on the market, and the price goes down.
In both cases, the market "wants" to take the wrong price and send it toward the equilibrium price. Once it's there, or close, it will automatically adjust as the equilibrium price changes due to new developments in the market (maybe a drop in demand, a disruption in supply, whatever).
So what is this hat shortage coming from?! There's only a shortage when the government artificially intervenes and sets the price too low, such as in the case of generators. If left to the market, the price will increase (attracting suppliers & dissuading buyers) until there's no shortage.
Now, yes, maybe there's a shortage based on how many hats we'd LIKE to be on the market, but that's not economics problems. As you'll recall from the first day of any decent econ class, economics can be thought of as the study of scarcity. If there's enough of something- like air- there's no market for it. Everybody has enough. If you think everybody should own a hat, that's admirable, I guess, but then there are tools like subsudies and so on that work within the market.
Really, get out and draw the supply & demand curves. The answer is in the graph.
|
|
| |
|
|
|
OzzyKP
|
|
Rockville, MD
Oct 1999
time: 00:37
|
|
quote:
Originally posted by St Leo
quote:
Originally posted by OzzyKP
But if we accept the assertion that humans are naturally altuistic, compassionate, etc, then we can be confident that if given the opportunity, private interests would fill the vacuum were government to abandon social services. Churches, charities, non-profits would step up to the plate and provide all the essential services (and yes they are essential) that government now provides. |
That they would. Unfortunately, the little fish don't have the resources to maintain the same level of universal accessibility a government can. They are also much more likely to be biased in favour of some minority.
|
I believe the resources would be there. I am in the non-profit field, and I know how much charitable giving fluxiates with the economy. If people have more extra money, they give away more. If government services were cut, and taxes were cut in the same proportion, then private services would have more funds. Perhaps not perfect, but sufficient.
The bias is a valid criticism. A teacher once used the example of if rich parents were giving money to support a school, they'd all give money to their already well financed school, rather than the inner city one that needs it more. Admittedly, it wouldn't be a perfect set up. But honestly, things aren't incredibly equitable with the government here (i dunno about other countries) anyways. Schools in rich districts get more money than others.
|
|
| |
All times are GMT. The time now is 05:37.
Apolyton Time is 00:37. |
top of page
|
| archivepost |
|
Forum Rules:
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts
|
HTML code is ON
vB code is ON
Smilies are ON
[IMG] code is ON
|
|
|
|
|
|
06-07-2004 14:26
|
|