What people see is the imbalance in how much both sides win and assume that a less win is a loss ... that's why people have gotten stupid about how the market works. They see the lowest as being a loss even when ... it's still really a win.
The argumentation here for trade works in a static system, where utility is invariable. If opportunity costs shift trade becomes unsustainable. And by then specialization locks the firms in a check.
@Researchrules that's untrue trade works fine when opportunity costs shift. I don't know where you got your information from, but current understandings of economics suggest quite the opposite.
@devdoger62 Arguments are drawn from the evolutionary theory, history and thermodynamics.
The second law of thermodynamics states that when energy is transferred from one entity to another, with loss of energy. Trade is made of loss, as trade implies transfer of energy from one entity to another. Have you heard of "transfer costs"?
Fossil records: Specialized species are most vulnerable to extinction. Natural selection favors autarky, not trade.
@devdoger62 Moving goods from point A to point B involves costs and risks. There is also the cost of inventories involved.
If I can grow an acre of wheat in Europe and that production is insufficient, than I'm forced to increase the productivity (innovate) and build a greenhouse. But if I rely on trade, I will never be compelled to build a greenhouse.
@Researchrules Except innovation happens every day and we do rely on trade. Regardless of your logic your conclusion is unsound. Innovation and trade together maximize efficiency. Also applying the laws physics and evolution to economics is an ineffective argument. In particular your misuse of the laws of thermodynamics is strikingly similar to the people who thinks it proves the existence of god. I suggest consulting an economics professor. .
@devdoger62 Innovation is a result of people wanting less dependence on other people. A decent analogy would be a limb-less guy and a blind guy. They can cooperate and specialize to provide specific services (the blind might buy a bicycle and the limb-less contact lenses). But their averaged capabilities would still be inferior to individual ones.
@devdoger62 Physics apply to all fields, from biology to economics, since physics is based on mathematics. Transfer costs ~ Heat loss. Also from accounting (periodic costs ~ heat loss).
@devdoger62 Just to give you an example. Porcelain in Europe was developed not by continuous trade with the Chinese, but by trying to obtain an autarky. Porcelain was traded for gold and gold was expensive to collect so a price employed an alchemist to solve the problem.
@Researchrules Ill give you more examples I-pads, microwaves, the internet. Innovation happens plain and simple. Second physics does not play a large role in economics(much like physics plays NO role in poly sci), psychology plays the predominant role The world you live in contradicts your theory were as my theory explains the world we live in. What it really comes down to is some people and land are just better equipped to produce certain products, meaning trade utilizes resources best.
@devdoger62 Well, innovation doesn't "just" happen. Your perspective on innovation is that you could sip a martini on a beach and get internet and all.
Also, "political science" is an oxymoron.
Political = creating arbitrary rules to guide a desired system, based on a personal, subjective assessment
Science = discovering rules which guide an existent system, based on an impersonal assessment.
@devdoger62 Just look at ISI classifications. Science and "social science" are labelled separately. Why you may ask? Because "social science" like psychology, sociology and economics do not employ the scientific method decently enough to fit among physics and chemistry.
After almost two centuries of development and research you still don't have an inventory assessment model to account for "Black Friday".
The economist in the Hellenistic period was a cashier.
@devdoger62 The authentic definition of an economist from the times of Ptolemy is that of a lowly clerk responsible for collecting money from tax-farmers. Oikos+nomos means house-management. Economics is not science, it is a management technique.
The eklogistes is above the oikonomos. The logistes (as in logistics) moves resources from one "house" to another. The eklogistes stands for accountant or "macro-economist" in today's logic.
But you must remember those who actually have the wealth are the winners. The owners. The labor, are just part of the cogs in the wheel-- labor is the cost of the production. So yeah, I'd agree the owners of the wealth win by trade. But labor doesn't always. Neither does the consumer.
Increased trade increases the demand for labor, and the price of it (wages) too. WIN!
+Trade = +Cheaper Goods
Increased trade allows competition in price and quality of the goods, consumers pay less for better products, their purchase power is higher because of cheaper goods. WIN!
@ricardoguateThe labor portion can be convinced that if they work harder enough they can forgo their current job (farmer or manufacturing of their own item) to join the labor force of said company.That said company then turns around and never fulfills such lofty potential incentive, the wage doesn't increase or amount to anything. They are thus exploited. Stuck in the situation the labor is confined to only work in the company-- the person has sold their property & prior trade.
@jmitterii2 You need to understande the nature of wages, their increase or decrease is subject to the laws of offer and demand like any other product. Im sorry if you are stuck in a crapy job, but in a more vibrant economy where your labour would be demanded you could switch to a job that pays better for what ever skills you have to offer. Labour prices (wages) work like any other product. What do you understand or mean when you say "Exploited"?
@devdoger62 Would be great. However some industries require heavy capital positions, have to have money to make money. You dream. Your statement is the same as "become a dictator or king." Are you kidding me? Sure I could go out and make a small business, again requires capital to begin with. And most small businesses fail. And this very system squeezes out small competitors in favor of a few large businesses.
@devdoger62 facts are specialization does work, but isn't clean and fancy free. It does not justify laissez faire approach just as communism and socialism doesn't justify a pure centralized planning system. Over simplification. Did you know that the bernoulli principle isn't the reason why an airplane flies, it is a simplified method to explain the general idea. But bernoulli princ. doesn't explain why an airplane can still fly upside down or symmetrical wing can fly.
This is econ for down syndrome kids at night school. If you dont know this thank a public scool union TEACHER. =O GET SMATER AMERICA!!!!!!!!!!!!!!!!!! =O
Just wondering, does this include the variables of price and demand? Despite how mathematically true this is, why would someone create 1000 stalks of corn when they could create 200 socks and 600 stalks of corn, therefore eliminating the "need" to trade with Lou when Lou affects a mere 2.5% of Fritz's profit?
I may be wrong, but I don't know if P & D affects this example.
Brilliantly true. Free trade is also great because you're not forced into it. If you don't like a deal for any reason, you have the choice not to partake. This concept works for anything. I'm not willing to trade my cash for a $200 set of Dr Dree headphones, it's a rip off. However, I'll shop amazon for another set I feel is worth the money. No force, only choice.
@PanzerDivisionBOM If i understand correctly your argument is that cost externalization exists because not everything is private ???
F**k hope that never happens i wonder how long for basic resources to be monopolized.
Beside this would be immoral because no one created land and natural resources ,nature did. Owning them for sake of owning is direct insult towards rest of mankind especially those unborn yet.
Of course, if supply does that, there'll be no scarcity and no motive so save money (aka gather capital) and reinvest. The perfect socialist society. Unfortunately the laws of physics do not allow us to create infinite stuff.
In reality, everything is a scarce resource, starting with the most obvious: human labor. As human labor is needed to create stuff, the result of human labor is obviously scarce, not infinite, not even abundant.
If you don't like Fritz's corn or Lou's socks, you're free to NOT buy from any of them. You can even fool yourselves into thinking that because Fritz might use pesticides or Lou might use bad yarn that makes trade inherently bad but you would be wrong. You could test you hypothesis like this: how much time would you be able to survive if every think you use is produced by you and yourself only (no trade whatsoever).
@ValentinN84 Realistically speaking, Fritz uses pesticides because it's the only way you can grow corn on the scale needed for human survival and Lou uses cheap yarn because it results in cheaper, more accessible socks. You want food without pesticides and socks that last a life time? There's that too, it's called organic food and brand socks. You don't like the extra price you pay for them? You probably don't understand how supply and demand works, so might I suggest looking into that.
@ValentinN84 I know exactly how supply and demand work in fact it is inherently flawed and it forbids the state of abundance to occur.
If supply goes too infinite, price and thus profits drops to zero means there is no incentive to produce even if there is real demand that does not signaling the market because of lack of purchasing power.
About shitty socks example it is pure waste of earth natural resources. Which are getting more scarce at the expectational rate
@shogu666 (Part 1 of 2) You're not keeping supply and demand in account when "waste of earth natural resources" occurs. If the scarcity rises, the price rises, and people buy less and find alternatives. The market prices convey information about constantly changing circumstances that no one human, or group of humans can possibly know.
@potosinodelcerro12 "If the scarcity rises, the price rises, and people buy less and find alternatives"
Price mechanism is actually a failure because of cost externalization. Companies all around the world did trillions in dollars in environmental damage and it is unaccounted for.
Beside even if price mechanism did work it gives signal way to late like now we are 100% dependent agriculture/industry on oil and it is gonna collapse soon.
@shogu666 That is definitely a role for government to play: if external costs such as environmental damage cause harm to non-consenting parties and their property, that should be illegal and should be punishable by law.
Government's proper role to protect life, liberty and property.
@potosinodelcerro12 : "if external costs such as environmental damage cause harm to non-consenting parties and their property, that should be illegal and should be punishable by law."
Modern economy would not be able exist it that was actually implemented !!!!
"How is this related to the price mechanism?" it is related that price does not describe reality thus is very inaccurate signal of what is actually going on.
@shogu666 (Part 2 of 2) Further, supply cannot be infinite, there is not infinite capital and can never be infinite capital. The prices will continue to fall in a competitive and changing marketplace, through automation, more advance transportation and retailing systems, more efficient management structures, etc. leaving people free to pursue other activities that can now be done by machines and/or by fewer people than before... which leaves us with more output and wealth.
Of source it can be (relatively speaking as more supply than demand), actually it already is, we produce more food than entire world would need to be feed but 2 billion people starve due inherited waste in monetary - trade economics
Also you are speaking of capital. You don eat capital nor you can stuff it into your car.
You eat food and tank oil. Here is your main flaw of reasoning.
@shogu666 The world produces an abundance of food, yes, which is a good thing. Poor people don't have access to the food because they have no means to obtain it (i.e. no capital goods or services to exchange). They are poor precisely because they are not free to enterprise and/or the government in their country is not effective in securing property rights, thus destroying the incentive to work and create wealth. Why build anything if your neighbor or the government will destroy it?
@potosinodelcerro12 "They are poor precisely because they are not free to enterprise and/or the government in their country is not effective"
Wrong on many levels.
First
Waste is build in system - watch?v=0dh_ivXZSiU
Second
Western corporation comes to third world countries and basically are raping them for profit. Our "high standard of living is builded upon poor countries sweet and resources.
If they get richer we will get poorer which already happens (china)
@shogu666 That's very true, and I never claimed infinite potential, you did. Pricing allows for us to live within the confines of what is possibility by conveying information about what is available and what is most effective and efficient at any one time. We must live within the most efficient means possible and can work to expand those means.
@potosinodelcerro12 But monetary economics demand constant growth otherwise economy collapses. Why do you think everyone is so concerned about growth.
Also i pointed out price mechanism is detached from reality and is very inefficient signal.
"We must live within the most efficient means possible"
Sorry but efficiency is enemy of monetary economics.
Better efficiency = less need for cyclical consumption = economy collapses.
Funny that you should fetishize money, because what you are describing is Keynesian inflationism. That's a separate phenomenon from the market society itself, and arguably a fundamental negation of the market society. In the absence of a fiat monopoly currency standard with legal tender laws and systematic runaway inflation, and in the absence of easy credit policies, you can have genuine growth and long-term predictability instead of credit cycles.
Being critical of growth because it cannot go on forever seems to me incomprehensible. Surely if we ever do achieve some theoretical, absolute outer limits of human and technological potential, this is something to be lauded?
Cost externalization isn't specifically Keynesian, but a more general failure of the legal system. Again: not inherent to the free market society itself, but a problem with the law. If the courts categorically refused to enforce property rights -
- in regards to bicycles in the same way as they do with e.g. the environment, then large private businesses would spring up to drive around with trucks, collect unattended bicycles and resell them, and fascist ideologues and econometricians, masquerading as economists, would theorize about external costs and inherent failure in the bicycle market.
Cyclical consumption - the business cycle or "credit cycle" - is a sign of -
- what we might call intertemporal disequilibrium, and one cause of that - the major cause in the modern world, I would argue - is credit manipulation.
I think the gold standard would be a step in the right direction in terms of acheiving a sustainable, efficient structure of production, but it does not completely protect against the activities of central banks and other state agencies. It's not a panacea.
"Cost externalization happens because of cost efficiency mechanism which is market"
Then you mean something very different by free enterprise than I do.
I'm talking about private property rights, in the broadest sense, clearly defined and earnestly enforced, and the relationships which emerge from that institution. The exact forms that those relationships take, whether it be hierarchical or communal firms, trades or mutual gifts and charity, employment or -
- self-employment etc. are all circumstantial and incidental.
Our mixed economy holds some likenesses to what I would expect free enterprise to look like, but it does not fit the description, because it does not emerge from any consistent notion of private property.
I realize that this does not address your statements directly. I can make arguments from economic theory to support my contentions, but I would first like to establish what we're supposed to be arguing over.
@PanzerDivisionBOM What i meant is cost efficiency mechanism is compelling everyone to externalize the cost in order to stay competitive in a free market environment,
The more you externalize the better position you have
Even if everything was private the more you externalize the better your business is.
"What I meant [...] The more you externalize, the better position you have."
Yes, of course that is true. If you take some random person's car off of the street and drive away in it, and "externalize the cost" of that car to the person who bought it, then you're in a better position than you were before. If you "externalize the cost" of some random stranger's house by claiming it for your own and reselling it, then you're in a better position than you were in before. -
- Those things actually happen sometimes, but they are dealt with by the law as theft, fraud or vandalism. Property crimes. The law isn't necessarily good at handling even these cases mind you, but it's good enough to at least somewhat discourage these practices.
If the law granted categorical exclusions to automobile ownership, then don't you think we would see multi-million dollar multinational corporations crop up to exploit that? -
- Would we then call that "market failure", as well?
"No one created land and natural resources"
That's true of everything. As exposited by Locke and repeated by many, many others, including Murray Rothbard: man does not have the power of original creation, but only that of transformation. Still, we can have emergent criteria for homesteading, which can create consistent private property rights and allow a market process to take place.
@PanzerDivisionBOM Now image the same exact mechanics apply to free market economy where competition is not a choice but necessity Having better position is a must if you want to survive there
What kind of values and incentives such a mechanics promotes ?
Liberals you dont understand that free market is an Utopian concept that based on values fallacy- they create opposite behavior than the one hoped for and there is no fixing it by law. Law doesnt work where $ are concerned
"Having a better position is a must if you want to survive there"
What does that even mean? "Better" how, and better than what?
Are you saying that, if you had to barter for things without the aid of money as a medium of exchange, driving off in someone else's car would no longer leave you better off?
I once again feel I must question your conception of a free market society. I guess mine is sort of a nonstandard definition, but the one you propose seems defined by -
- a complete absence of property rights. As in, I can grab anything I want completely without fear of any legal retribution, and any attempt by courts or police to defend your property against my theft is a violation of the free market. Do you understand that this is not the social order for which I am arguing? Do you concede that this implicit definition of yours is very different from what most mean by that term?
Even apart from that, even in our current, corporatist, -
- mixed economy, you still get rewarded for producing goods with less inputs, so long as the government doesn't object too strenuously. If there does exist this technology which allows you to produce the same goods with less input, then using it will allow you to underbid your competitors and make enormous profits.
Scarcity is a mere fact of existence. Human desires are infinite, resources are finite. Even in the Garden of Eden, every individual human being is still unique.
This is fallacy because even if that were true you still can only consume limited amount of stuff within 24hr period , and when you consume one thing you dont cosume other at the same time and not everyone is consuming the same thing at exact same time.
But is isnt, consumerism is a modern age invention.
@PanzerDivisionBOM "Even in the Garden of Eden, every individual human being is still unique."
Here we go again ideology more important than facts and logic. Somehow providing basic necessities of life for entire human population is making everyone equal. dah
Guess what no it isint !!! Even if we would create abundance of food that would not magically make everyone equal.
@PanzerDivisionBOM What does that even mean? "Better" how, and better than what?
Better then your competition. If you get out competed you go broke and lose income which means everything because it is your access to resources and social status.
Again values and incentives are very negative.
"I guess mine is sort of a nonstandard definition"
Nope you just dont understand what you are advocating
@PanzerDivisionBOM If i understand correctly your argument is that cost externalization exists because not everything is private ???
Fuck hope that never happens i wonder how long for basic resources to be monopolized.
Beside this would be immoral because no one created land and natural resources ,nature did. Owning them for sake of owning is direct insult towards rest of mankind especially those unborn yet.
@PanzerDivisionBOM If i understand correctly your argument is that cost externalization exists because not everything is private ???
F**k hope that never happens i wonder how long for basic resources to be monopolized.
Beside this would be immoral because no one created land and natural resources ,nature did. Owning them for sake of owning is direct insult towards rest of mankind especially those unborn yet.
@PanzerDivisionBOM If i understand correctly your argument is that cost externalization exists because not everything is private ???
F**k hope that never happens i wonder how long for basic resources to be monopolized.
Beside this would be immoral because no one created land and natural resources ,nature did. Owning them for sake of owning is direct insult towards rest of mankind especially those unborn yet.
@ValentinN84 I agree on the principal that we are 100% depended on other people and trade was the way of distributing stuff. But this concept assumes perpetual scarcity which is not necessarily longer the case .
We have technological understanding to create much more than we can consume through means of automation which render trade obsolete.
Unfortunately status quo requires trade in order to sustain cyclical consumption thus abundance will not emerge out of free market policy
Fritz is going that ad superb pesticides into his corn production so he can get more profit.
From now on everyone will east juicy healthy corn that will keep their bodies healthy and free of toxins.
Lou is going to use cheaper material that is not so obvious to the Fritz and socks gonna break after 5 years rather then 10 years so socks will need to be re-bought faster
@shogu666 No, because now Oscar will come along, and create socks that are more valuable to consumers (including Fritz). If Lou's socks are not good enough, Oscar's will be, encouraging quality products because of the competition between different entities. It's capitalism at it's best, and wealth is created in the process.
"Cartoon concepts' are just another way to explaining things. But hey, if you rahter read 800 pages of boring words, go for it. The message is still the same.
Oscars socks and much more expensive thus not many people will be able to afford, because there is no unlimited purchase power at any given time around. Pretty much what is encouraged is low quality socks while only certain individuals can afford "normal" socks designed to last.
And it is only assuming that entry barriers are low enough for Oscar to enter the market and Fritz will stick to fair competition which never happens when $ are at stake
Lou is being exploited because he only gets to make 25 of the nation's socks while Fritz gets to control 1,000 of the nation's corn production.
So, to make it fair, Fritz's production would be divided evenly between him and Lou, leading Fritz to lose interest in maintaining all the innovations and efficiencies he had developed previously and then both would only produce 25 units each and they would finally become equal and live happily ever after in their primative Socialist utopia.
@Salvysahagun In this case they are not using currency, they are directly trading a good for a good. The principle still holds if you use currency. Trade doesn't just mean international trade. You do not have to sew your own clothes or raise chickens in your home. You specialize in what you are good at and use money to buy everything else you need for cheaper than it would cost for you to do it yourself. Money makes this process easier.
They should have just named them "Hayek" and "Mises", and then mentioned that they were real people. Why not add exposure for them instead of disguise them....they are some of the few economists that actually get it right!
Gobal total wealth increases whenever labor is involved in producing a product. Labor is intangible but it is very much a trade-able item. The best example of this is the production of software. Unlike a sock or ear of corn, computer software is intangible and is primarily created through labor. Whenever computer software, an app, movie, game, etc., is created, total wealth in the world goes up! (The pie gets bigger). If people are smart, they trade that which they create best.
But socks and corn don't come from nowhere. There has to expenditure to someone else to produce them, and this video suggests that expenditure can be lower for these two cartoon guys. Thus the total wealth ceated is still the same regardless of how they slice up the pie between them and those they pay to help create the socks and corn.
@stevo728822 The two cartoon guys do have lower expenditures. Wealth is created from less to more, not nothing to something. Sure there is expenditure involved in the production, in this case the farmers need a few things for production (expenditures), land, seeds, water, tools and labor. The wealth is the new product, that is the production of wealth and it costs them less in expenditures than they receive in sales (the difference being profit - which drives them to produce more).
@therotaryrocket Your maths is based solely upon these two guys....there are other people involved as well...if these pay less...someone else gets less. Yo7u have to think of the whole system, not just a subset of it.
anyone who believes this rank oversimplification is a right-wing idiot. Really, Lou and Fritz just produce all that shit themselves? On land that I suppose was given to them by baby jesus? Who knows what they pay those animals that do the actual "value adding" in the development of whatever resources Fritz and Lou "own" But you know "its made of win, bro" sweet.
It is impossible to create wealth without creating a speculative bubble. That is because wealth obtains its value from scarcity. If there are more units of wealth, then there is less scarcity, and so the units of wealth themselves lose value to compensate. If you try to increase demand (advertisements, media, etc.) then you create a bubble that is bound to collapse sooner or later.
This is similar to why you cannot simply print money or synthesize gold to create wealth.
@kDest the point in the video was that by specializing we can be more productive, he wasn't saying trade creates wealth out of nothing, trade leads to higher production which in turn creates more wealth.
>>trade leads to higher production which in turn creates more wealth.
But again you are using the wrong verb. Creation never happens, trade must mean that someone loses wealth so that you gain it. Even with higher productivity, a surplus of wealth must mean that for the wealthy population, the units of wealth have less value due to their saturation.
One of the basic rules of economics is that when a good is subsidized it distorts normal competitive processes and allows faulty, inefficient and expensive goods produced by incompetent producers to take over the market cost us all more in the long run. In the market of ideas there is one good that is very heavily subsidized. The idea that corporate capitalism is an unalloyed good. Every media venue is now filled up with subsidized apologists for greed clogging up legitimate discussion.
Adam Smith would definitely regret writing his foolish book if he saw the reality today. The fact is, the idealized notion comparative advantage and free trade ignores the employment issue of a country. People rely on jobs to gain money, which in turn enables them to buy goods, and which in turn creates demand, and which in turn enables the creation of wealth. If people have no jobs, then what good are the notion of free trade and comparative advantage? There is no free lunch in this world.
@stephentsang2000 this theory that this guy explains applies to everything in the economy, the economy is based on trade. employment is simply a form of trade. you trade your labor, the employer trades a wage. if people don't have jobs, it's because either the employee or the employer does not want to engage in the trade at the established exchange rate. the most part it's employers, which is why as keynes explained wages need to drop to restore unemployment.
@Welsh77 And when the assumptions turn out to be wrong, all hell breaks lose. Did you ever seen benevolent bankers or generous misers? Talking about comparative advantage and free trade in fiction is okay, but putting it seriously into real life scenarios is like talking trash.
@stephentsang2000 our problem is not with this model or with free trade, its more with the massive money supply and the monopoly that a very small number of people in the fed and large banks have on it. we don't promote competition in the issuing of currency and lending industries, that's why we have the problems we have, NOT because voluntary trade doesn't create wealth. the government is too powerful, if we restricted its power we'd be better off
@stephentsang2000 the minimum wage often interferes with this correction for the poorest and most unskilled members of society, rendering them jobless. this theory is sound and it applies in every way shape and form to today's economy. he explains what voluntary trade does: create wealth. he doesn't explain that involuntary trade, specifically between taxpayers and the government in times of recession when stimulus occurs, transfers wealth, imposing an opportunity cost on the tax payer
@stephentsang2000 of the wealth that he could have reaped from using those resources to voluntarily trade them elsewhere. this theory does not imply a free lunch. you make the assumption that it doesn't take any effort to find trading partners and establish an exchange rate satisfactory to both. in today's world, this is EXTREMELY difficult because of the barriers to free trade and the barriers to exchange rates that are imposed on our society.
In an idealised situation like the corn state and the sock state, the original corn farmers or sock workers were kicked out of their corn fields or production lines and became unemployed. If these surplus work forces were not able to be absorbed into any newly "invented" jobs, then they will have no money and there will be a contraction of demand for goods. This will lead to contraction of supply and less wealth is created. Agree?
Free Trade & Comparative Advantage would true for creating more wealth, if and only if the surplus redundant workforce of both countries were able to be absorbed into newly "invented" jobs. Get what I mean?
@Welsh77 And for this reason, Asian governments don't believe in these Western shit. Some Chinese provinces even impose high tax for purchasing of new construction machineries, because absorbing more "man power" into the building industry is more important than automation. Machine efficiency (comparative advantage over man power) creates more wealth for the employers, but less wealth for society as a whole because of unemployment and the subsequent contraction of demand.
@stephentsang2000 you completely underestimate the abililty of people in the capitalist system to find new uses for themselves. capitalism is not perfect, obviously some people will not be able to find a job. you imply that this hasn't always been the case, but it has. it's not a new obstacle just because of machinery and technology. what capitalism does BEST is recycle the labor force, when it is allowed to. what i just explained is capitalism is seldom allowed to recycle labor because
@Welsh77 yeah, you are correct for if you are living in a idealized scenario in which all those "surplus workforce" are as smart as Bill Gates in finding their new way integrating into the production force under the circumstances that they could sustain their living during their "no body knows how long it would take" quest. Just take a look around this world and you will understand a theory is true if and only if the necessary assumptions are there.
@stephentsang2000 of government intervention. steve forbes wrote "capitalism: a true love story" in which he explains that capitalism doesn't run on greed, but on entrepreneurs by their wit finding new things that people want, and providing them. products only exist because there's a demand for them, but you can't assume everyone knows all the possibilities of what they demand, because not all of them have been invented yet! entreprenuers come up with new ideas, and then once offered
@stephentsang2000 some people say "i want that!" other times they dont, and the product/service leaves the market. this is say's law, demonized by keynesians that supply creates its own demand. but that's not what it says, and its important in understanding how free markets work. it doesn't seem to have any application today because there are SO MANY disincentives for entrepreneurs to propose these new ideas. high taxes, weak patent laws, barriers to trade, and anti-competition policies
@stephentsang2000 drive these people away from using their wit in a way to promote their self interest, which at the same time promotes the interest of everyone who wants their new creation. you simply don't understand how a free market works, or the incentives that it's supposed to have for its dwellers. by saying that a contraction of demand will lead to a contraction of supply, you evidence this. supply and demand are INDEPENDENT, one never has in influence on another. ask any economist.
@stephentsang2000 i find it ironic that internationally, china is PURELY CAPITALIST. ask any marxist, they'll tell you china is. they engage in trade with other countries freely, because they know they can't control the whole world and that not being capitalist would put them behind. its only domestically that they impose the controls you're talking about, and look at the results. you question the principle of creative destruction in a free market. you shouldn't, the govt is impairing it.
@Welsh77 what i mean by my last comment is that china flourishes internationally, they benefit alot because of the trade they engage in. yet domestically, their economy is weak. by highly taxing machinery, they provide obstacles to people to create new products and services, or invest in anything that might generate them a return. this seems like common sense to me, but i guess not to others. capitalism has helped more people than any other system, i dont know why we strive for its truest versio
@stephentsang2000 lack of demand does not create recessions by the way either. that's the biggest keynesian fallacy of all. its the easy money that we have that creates no incentive for anyone to save anything. if people had to consume less when they took out loans, there wouldn't be runaway artificial demand that all of a sudden dies when interest rates rise. demand is not the root of the problem, money and how it influences peoples expectations is. keynes was just wrong.
@Welsh77 I don't care what Keynes says. Many things in this world takes only common sense to understand.
if money could not be channeled into the hands of individuals (thru unemployment), but concentrated in the hands of those of have comparative advantage, and lead to the subsequent decline of total demand and subsequent decrease of production (wealth creation), then what good is it?
Agreed. Jobs are more important than production. The best way to fix the economy is to put people to work. We should build the great pyramids of the united states, and do it by hand with no cranes, tractors, or machines. That way we could employ MILLIONS of people. We would have zero% unemployment and we would be the wealthiest nation in the history of the world!!!
We should pay the pyramid workers $100/hour too. Think of all the DEMAND that would create!!!
Haha, dumb economists of the West thought that this could create more wealth, but ignores the fact that how such created wealth could be channelled into individual's hands. The sock factory workers in corn producing countries would lose their jobs, part were absorbed into the corn fields, but majority of them have no money to buy anything because of umemployment. The demand for socks and corn drops because of people getting poorer, and eventually less supply, and less wealth is created.
Agreed. This is why we need to destroy all factories that use mechanical production. All machines and technology that take jobs away should be banned. Producing goods by hand with no machines creates lots of jobs. Why let a machine build a car when you can hire 100 people to make it by hand? If we destroy enough technology we could have zero % unemployment. Everyone would have a job!
Think of all the demand these workers would create!!
@FartyFace Believe it or not some people actually agree with your satire. I was watching 60 minutes the other night and Lesley Stahl was interviewing the CEO of GE. Not to get into a discussion about GE, but Stahl actually complained that there was too much automation in the GE production process. I just shake my head and wonder how this kind of economic illiteracy still exists in America, then I remember how many people benefit from the ignorance.
@thereisnofirmament Any labor unions that exist are completely voluntary and there are no laws requiring you join one unlike the United States, and Singapore has no minimum wage while Hong Kong passed their first ever minimum wage law in 2010. I define success as a mixture of GDP growth, GDP per capita, Income per capita relative to cost of living, and their standard of living. Hong Kong has a considerably high standard of living and massive GDP growth per capita.
@thereisnofirmament Uhh Hong Kong has a flat tax on land i believe and no income tax, Singapore could but it has been known for its lack of a saftey net so I doubt your claim however you cannot claim their success is from welfare programs.
I dont support large corporations all of the time I support Free Markets where there always exists options
@thereisnofirmament Gross assumption to gross assumption to gross assumption...Do you catch the drift of your statement? Hong Kong and Singapore never had these massive labor movements you speak of yet they have the freest most advanced economies and skilled work forces in Asia with the highest per capita income in their respective regions to match. You act as though having a govt. telling you when you can and cannot work and for how much with no consent of your own is a good thing.
@thereisnofirmament no, i didn't read wikipedia, the quote i gave you is in book one, chapter six, verse 7. i dont see a point in continuing this discussion, you were already dead wrong on smith arguing for everyone to be self employed, which any ape that reads his book knows isn't true. based on that claim i know you have not read the book, it is obvious that you are just grabbing random quotes. smith did not believe LTV was a sufficient explanation for value in modern economies.
@thereisnofirmament you clearly have no idea what you're talking about, and have not read the wealth of nations, in which adam smith states that for advanced economies: "The whole produce of labour does not always belong to the labourer. He must in most cases share it with the owner of the stock which employs him." - so smith did not believe solely in self employment. an economy run on self employment would be primitive. you are confusing smith with ricardo, smith did not believe in the LTV.
@thereisnofirmament if profit wouldn't exist in the labor market under competition in adam smith's model, why would employers ever hire anyone? who is going to hire someone if they dont make money off of them? the claim that exploiting labor is what profit is directly based on marx's theories of surplus value and his labor theory of value. you can't support adam smith and competition if you believe exploiting labor creates profit, and that profit is a bad thing...
@thereisnofirmament Correction, we have overpaid unskilled jobs because of the union struggle. The reason many jobs are paid higher is because of supply and demand with specialization and the degree of education, compared to GM and Ford janitors who because of the "union struggle" were making $25/hr.
@thereisnofirmament If we include firms with 5,000 or more your choice of emloyers increases from 981 to 1,956.
You have said there are only a "few" employers and that we have very limited choice. In my eyes 1,956 potential employers are more than a "few" and offers a great deal of choice - but I guess we're just different people.
@thereisnofirmament In 2008 there were 981 firms with 10,000 employees or more in the U.S. These firms combined employed about 27% of all employees. That, in my estimation, would be enough to manipulate, but not control, the overall labour market.
The trick, obviously, would be getting all these firms to cooperate. We might have better luck if we tried to corner the market on a specific type of labour.
Just try building any large construction project without the Teamsters.
@thereisnofirmament A market is competitive when there are multiple buyers and sellers such that no one is "the only game in town" or comprises a sufficently large share of the market to manipulate prices. Some labour unions, aidied by legistlation, comprise a sufficently large share of some types of labour that they can (and do) manipulate those markets.
Can you point to any examples of buyers having that kind of collective bargaining power in the labour market?
No, that is incorrect. If our standard of living was due to public intervention the Soviet Union would have been a utopia and Cuba would be the main attraction of the world. The reason our standard of living is so high is because of our capitalist system providing relatively high paying jobs to the majority of our population. As crony as the system is with thousands of tax "giveaways" subsidies and regulations, it still works fairly well.
@thereisnofirmament According to the International Franchise Association about 18 million people are employed by franchises in the U.S. Assuming all franchise outlets employ less than 100 people we can subtract that from 41 million to get 23 million employed by non-franchised small businesses. Now add in the 15 million who are self employed and out of a total workforce of 134 million, 38 million, or 28% do not work for a franchise or big business. There's still a place for entrepreneurship.
@thereisnofirmament This discussion is about your options for making a living, specifically your options as an employee. I have tried to point out the diverstiy of independent businesses as evidence you have many options. You have countered that most, if not all, of these businesses are ultimately beholden to the richest 10%, our real employers.
I would like to point out that 10% of the (U.S.) population is still 30 million people. That's a lot of potential employers.
@thereisnofirmament Let's assume this statistic is correct, this still means that 50% of the banks were indeed making mandated risky loans. On top of all this you have the privatized profit mixed with socialized risk which is an absolute failure on so many levels and if you do not know what I am talking about you should not be debating me.
Also, I enjoy how you bash bush at the end as a little cream on the top. Really? Friedman? Hayek? Von Mises? All insane to you? Wow you have redefined sanity
Growing a garden or building a computer does not create wealth! Someone please take econ 101 before commenting! If everyone is allergic to vegetables, and you are surrounded by cavemen, growing gardens nor building computers produces wealth! What produces wealth is the want or the need for a service or product. Putting crap on a stick is a production of wealth if someone wants it. Therefore, the more the want or need is the more it is worth, and the less there is of it the more it is worth.
@thereisnofirmament This discussion is about control over the means of production, not the accumulation of wealth. Your '10% owns 80%' is not central to our discussion.
Most franchises operate under their own ownership and management and for their own profit. They should be considered independent businesses. But even if we exclude them we still see about 40% of employees working for small, non-franchised, businesses as franchises account for 13% of all employment in the U.S. (Census Bureau)
Wow, what a load of crap. The idea that evolved in "economics" evolved by tea-baggers, not real economists. This is economics for the retarded. Yes, two people can trade with each other and both can get wealthy but if each person is a monopoly, how is price set? The two people that are corporations will trade between themselves at the lowest possible value but will inflate the price for their workers, which is why there are laws against monopolies. Do yourself a favor and take a real econ course
What people see is the imbalance in how much both sides win and assume that a less win is a loss ... that's why people have gotten stupid about how the market works. They see the lowest as being a loss even when ... it's still really a win.
KittenKoder 6 days ago
if someone win more than you ''win'' ..that's mean ...you're actually lose...
ThePt8 1 week ago
That's why I hated microeconomics. It was incredibly simplistic.
maemorri 1 week ago
The argumentation here for trade works in a static system, where utility is invariable. If opportunity costs shift trade becomes unsustainable. And by then specialization locks the firms in a check.
Researchrules 2 weeks ago
@Researchrules that's untrue trade works fine when opportunity costs shift. I don't know where you got your information from, but current understandings of economics suggest quite the opposite.
devdoger62 1 week ago
@devdoger62 Arguments are drawn from the evolutionary theory, history and thermodynamics.
The second law of thermodynamics states that when energy is transferred from one entity to another, with loss of energy. Trade is made of loss, as trade implies transfer of energy from one entity to another. Have you heard of "transfer costs"?
Fossil records: Specialized species are most vulnerable to extinction. Natural selection favors autarky, not trade.
Researchrules 1 week ago
@devdoger62 Moving goods from point A to point B involves costs and risks. There is also the cost of inventories involved.
If I can grow an acre of wheat in Europe and that production is insufficient, than I'm forced to increase the productivity (innovate) and build a greenhouse. But if I rely on trade, I will never be compelled to build a greenhouse.
Researchrules 1 week ago
@Researchrules Except innovation happens every day and we do rely on trade. Regardless of your logic your conclusion is unsound. Innovation and trade together maximize efficiency. Also applying the laws physics and evolution to economics is an ineffective argument. In particular your misuse of the laws of thermodynamics is strikingly similar to the people who thinks it proves the existence of god. I suggest consulting an economics professor. .
devdoger62 1 week ago
@devdoger62 Innovation is a result of people wanting less dependence on other people. A decent analogy would be a limb-less guy and a blind guy. They can cooperate and specialize to provide specific services (the blind might buy a bicycle and the limb-less contact lenses). But their averaged capabilities would still be inferior to individual ones.
Researchrules 6 days ago
@devdoger62 Physics apply to all fields, from biology to economics, since physics is based on mathematics. Transfer costs ~ Heat loss. Also from accounting (periodic costs ~ heat loss).
Researchrules 6 days ago
@devdoger62 Just to give you an example. Porcelain in Europe was developed not by continuous trade with the Chinese, but by trying to obtain an autarky. Porcelain was traded for gold and gold was expensive to collect so a price employed an alchemist to solve the problem.
Researchrules 6 days ago
@Researchrules Ill give you more examples I-pads, microwaves, the internet. Innovation happens plain and simple. Second physics does not play a large role in economics(much like physics plays NO role in poly sci), psychology plays the predominant role The world you live in contradicts your theory were as my theory explains the world we live in. What it really comes down to is some people and land are just better equipped to produce certain products, meaning trade utilizes resources best.
devdoger62 6 days ago
@devdoger62 Well, innovation doesn't "just" happen. Your perspective on innovation is that you could sip a martini on a beach and get internet and all.
Also, "political science" is an oxymoron.
Political = creating arbitrary rules to guide a desired system, based on a personal, subjective assessment
Science = discovering rules which guide an existent system, based on an impersonal assessment.
Researchrules 5 days ago
@devdoger62 Just look at ISI classifications. Science and "social science" are labelled separately. Why you may ask? Because "social science" like psychology, sociology and economics do not employ the scientific method decently enough to fit among physics and chemistry.
After almost two centuries of development and research you still don't have an inventory assessment model to account for "Black Friday".
The economist in the Hellenistic period was a cashier.
Researchrules 5 days ago
@devdoger62 The authentic definition of an economist from the times of Ptolemy is that of a lowly clerk responsible for collecting money from tax-farmers. Oikos+nomos means house-management. Economics is not science, it is a management technique.
The eklogistes is above the oikonomos. The logistes (as in logistics) moves resources from one "house" to another. The eklogistes stands for accountant or "macro-economist" in today's logic.
Researchrules 5 days ago
@devdoger62 "Social science" professors today are simply deluded. Just to give you a few examples of delusions
"modern representative democracy" -> oligarchy by Greek definitions or "Republic" by Roman ones
"macroeconomics" -> an oxymoron since a "house" is by definition a "small" entity
"ecology" -> simply wrong "periballogy" would have been a better term
Pleonasms commonly used are microeconomics and "home economics".
Researchrules 5 days ago
Lou is getting the best deal......
LocustLive 2 weeks ago
But you must remember those who actually have the wealth are the winners. The owners. The labor, are just part of the cogs in the wheel-- labor is the cost of the production. So yeah, I'd agree the owners of the wealth win by trade. But labor doesn't always. Neither does the consumer.
jmitterii2 2 weeks ago
@jmitterii2
No trade = no jobs
so...
+Trade = +Jobs
Increased trade increases the demand for labor, and the price of it (wages) too. WIN!
+Trade = +Cheaper Goods
Increased trade allows competition in price and quality of the goods, consumers pay less for better products, their purchase power is higher because of cheaper goods. WIN!
ricardoguate86 2 weeks ago
@ricardoguateThe labor portion can be convinced that if they work harder enough they can forgo their current job (farmer or manufacturing of their own item) to join the labor force of said company.That said company then turns around and never fulfills such lofty potential incentive, the wage doesn't increase or amount to anything. They are thus exploited. Stuck in the situation the labor is confined to only work in the company-- the person has sold their property & prior trade.
jmitterii2 2 weeks ago
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darkr0astedblend 1 week ago
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darkr0astedblend 1 week ago
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@jmitterii2 In a free market there is relatively much lower rates of unemployment and much higher job competition.
If an employer is dishonest to its workers, then they will tend to move to other businesses, namely competitors.
Ultimately, if the owner continues in dishonesty he will ultimately go out of business.
Not to talk about all it's costumers' views on the business which would eventually boycot them if they didn't change their ways.
darkr0astedblend 1 week ago
@jmitterii2 You need to understande the nature of wages, their increase or decrease is subject to the laws of offer and demand like any other product. Im sorry if you are stuck in a crapy job, but in a more vibrant economy where your labour would be demanded you could switch to a job that pays better for what ever skills you have to offer. Labour prices (wages) work like any other product. What do you understand or mean when you say "Exploited"?
ricardoguate86 1 week ago
@jmitterii2
Yes he does. The worker trades his work for money. It's basically the same.
Breaker242 2 weeks ago
@jmitterii2 then become an owner
devdoger62 1 week ago
@devdoger62 Would be great. However some industries require heavy capital positions, have to have money to make money. You dream. Your statement is the same as "become a dictator or king." Are you kidding me? Sure I could go out and make a small business, again requires capital to begin with. And most small businesses fail. And this very system squeezes out small competitors in favor of a few large businesses.
jmitterii2 1 week ago
@devdoger62 facts are specialization does work, but isn't clean and fancy free. It does not justify laissez faire approach just as communism and socialism doesn't justify a pure centralized planning system. Over simplification. Did you know that the bernoulli principle isn't the reason why an airplane flies, it is a simplified method to explain the general idea. But bernoulli princ. doesn't explain why an airplane can still fly upside down or symmetrical wing can fly.
jmitterii2 1 week ago
Sweet its Mises and Hayek!
BachGuitar3 3 weeks ago
This is confusing.
vonGleichenT 3 weeks ago in playlist Favorites
@vonGleichenT how so...?
BachGuitar3 3 weeks ago
This is econ for down syndrome kids at night school. If you dont know this thank a public scool union TEACHER. =O GET SMATER AMERICA!!!!!!!!!!!!!!!!!! =O
TyZi187 3 weeks ago in playlist Favorites
Just wondering, does this include the variables of price and demand? Despite how mathematically true this is, why would someone create 1000 stalks of corn when they could create 200 socks and 600 stalks of corn, therefore eliminating the "need" to trade with Lou when Lou affects a mere 2.5% of Fritz's profit?
I may be wrong, but I don't know if P & D affects this example.
jon99867 1 month ago in playlist Favorites
Brilliantly true. Free trade is also great because you're not forced into it. If you don't like a deal for any reason, you have the choice not to partake. This concept works for anything. I'm not willing to trade my cash for a $200 set of Dr Dree headphones, it's a rip off. However, I'll shop amazon for another set I feel is worth the money. No force, only choice.
joecow12 1 month ago
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@PanzerDivisionBOM If i understand correctly your argument is that cost externalization exists because not everything is private ???
F**k hope that never happens i wonder how long for basic resources to be monopolized.
Beside this would be immoral because no one created land and natural resources ,nature did. Owning them for sake of owning is direct insult towards rest of mankind especially those unborn yet.
Beside you missed the point of my argument
shogu666 1 month ago
made of win
FredDFry 1 month ago in playlist Favorites
@shogu666: "If supply goes too infinite"
Of course, if supply does that, there'll be no scarcity and no motive so save money (aka gather capital) and reinvest. The perfect socialist society. Unfortunately the laws of physics do not allow us to create infinite stuff.
In reality, everything is a scarce resource, starting with the most obvious: human labor. As human labor is needed to create stuff, the result of human labor is obviously scarce, not infinite, not even abundant.
ValentinN84 1 month ago
So, what your saying is that we need to change all currencies in the world into socks and corn in order to create wealth. Amazing.
wyman856 1 month ago
@wyman856 Wow you have good grammar for a 12 year old. Good job taking that from the video, dumb-ass.
windydays201 1 month ago
@windydays201 I'm sorry that sarcasm is lost on you. Didn't it just seem too stupid to be sincere?
wyman856 1 month ago
If you don't like Fritz's corn or Lou's socks, you're free to NOT buy from any of them. You can even fool yourselves into thinking that because Fritz might use pesticides or Lou might use bad yarn that makes trade inherently bad but you would be wrong. You could test you hypothesis like this: how much time would you be able to survive if every think you use is produced by you and yourself only (no trade whatsoever).
ValentinN84 1 month ago
@ValentinN84 Realistically speaking, Fritz uses pesticides because it's the only way you can grow corn on the scale needed for human survival and Lou uses cheap yarn because it results in cheaper, more accessible socks. You want food without pesticides and socks that last a life time? There's that too, it's called organic food and brand socks. You don't like the extra price you pay for them? You probably don't understand how supply and demand works, so might I suggest looking into that.
ValentinN84 1 month ago
@ValentinN84 I know exactly how supply and demand work in fact it is inherently flawed and it forbids the state of abundance to occur.
If supply goes too infinite, price and thus profits drops to zero means there is no incentive to produce even if there is real demand that does not signaling the market because of lack of purchasing power.
About shitty socks example it is pure waste of earth natural resources. Which are getting more scarce at the expectational rate
shogu666 1 month ago
@shogu666 (Part 1 of 2) You're not keeping supply and demand in account when "waste of earth natural resources" occurs. If the scarcity rises, the price rises, and people buy less and find alternatives. The market prices convey information about constantly changing circumstances that no one human, or group of humans can possibly know.
potosinodelcerro12 1 month ago
@potosinodelcerro12 "If the scarcity rises, the price rises, and people buy less and find alternatives"
Price mechanism is actually a failure because of cost externalization. Companies all around the world did trillions in dollars in environmental damage and it is unaccounted for.
Beside even if price mechanism did work it gives signal way to late like now we are 100% dependent agriculture/industry on oil and it is gonna collapse soon.
shogu666 1 month ago
@shogu666 That is definitely a role for government to play: if external costs such as environmental damage cause harm to non-consenting parties and their property, that should be illegal and should be punishable by law.
Government's proper role to protect life, liberty and property.
How is this related to the price mechanism?
potosinodelcerro12 1 month ago
@potosinodelcerro12 : "if external costs such as environmental damage cause harm to non-consenting parties and their property, that should be illegal and should be punishable by law."
Modern economy would not be able exist it that was actually implemented !!!!
"How is this related to the price mechanism?" it is related that price does not describe reality thus is very inaccurate signal of what is actually going on.
shogu666 1 month ago
@shogu666 (Part 2 of 2) Further, supply cannot be infinite, there is not infinite capital and can never be infinite capital. The prices will continue to fall in a competitive and changing marketplace, through automation, more advance transportation and retailing systems, more efficient management structures, etc. leaving people free to pursue other activities that can now be done by machines and/or by fewer people than before... which leaves us with more output and wealth.
potosinodelcerro12 1 month ago
@potosinodelcerro12 "Further, supply cannot be infinite"
Of source it can be (relatively speaking as more supply than demand), actually it already is, we produce more food than entire world would need to be feed but 2 billion people starve due inherited waste in monetary - trade economics
Also you are speaking of capital. You don eat capital nor you can stuff it into your car.
You eat food and tank oil. Here is your main flaw of reasoning.
Money sequences-retarded economy
shogu666 1 month ago
@shogu666 The world produces an abundance of food, yes, which is a good thing. Poor people don't have access to the food because they have no means to obtain it (i.e. no capital goods or services to exchange). They are poor precisely because they are not free to enterprise and/or the government in their country is not effective in securing property rights, thus destroying the incentive to work and create wealth. Why build anything if your neighbor or the government will destroy it?
potosinodelcerro12 1 month ago
@potosinodelcerro12 "They are poor precisely because they are not free to enterprise and/or the government in their country is not effective"
Wrong on many levels.
First
Waste is build in system - watch?v=0dh_ivXZSiU
Second
Western corporation comes to third world countries and basically are raping them for profit. Our "high standard of living is builded upon poor countries sweet and resources.
If they get richer we will get poorer which already happens (china)
shogu666 1 month ago
@potosinodelcerro12 "which leaves us with more output and wealth."
Also you should et some some arithmetic and biology class.
Exponential growth in a finite environment is impossible to sustain in long term and our planet is already at its limit.
Growth != prosperity.
shogu666 1 month ago
@shogu666 That's very true, and I never claimed infinite potential, you did. Pricing allows for us to live within the confines of what is possibility by conveying information about what is available and what is most effective and efficient at any one time. We must live within the most efficient means possible and can work to expand those means.
potosinodelcerro12 1 month ago
@potosinodelcerro12 But monetary economics demand constant growth otherwise economy collapses. Why do you think everyone is so concerned about growth.
Also i pointed out price mechanism is detached from reality and is very inefficient signal.
"We must live within the most efficient means possible"
Sorry but efficiency is enemy of monetary economics.
Better efficiency = less need for cyclical consumption = economy collapses.
shogu666 1 month ago
@shogu666
Funny that you should fetishize money, because what you are describing is Keynesian inflationism. That's a separate phenomenon from the market society itself, and arguably a fundamental negation of the market society. In the absence of a fiat monopoly currency standard with legal tender laws and systematic runaway inflation, and in the absence of easy credit policies, you can have genuine growth and long-term predictability instead of credit cycles.
PanzerDivisionBOM 1 month ago
@PanzerDivisionBOM "That's a separate phenomenon from the market "
Really ??
In gold standard environment cost externalization doesn't exist ??
In gold standard people dont need jobs ( or inefficiency) in order to sustain cyclical consumption ??
Really ??
"and in the absence of easy credit policies, you can have genuine growth and long-term predictability instead of credit cycles."
genuine growth is just it - growth, which cant go on forever unless we can manipulate reality
shogu666 1 month ago
@shogu666
Being critical of growth because it cannot go on forever seems to me incomprehensible. Surely if we ever do achieve some theoretical, absolute outer limits of human and technological potential, this is something to be lauded?
Cost externalization isn't specifically Keynesian, but a more general failure of the legal system. Again: not inherent to the free market society itself, but a problem with the law. If the courts categorically refused to enforce property rights -
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PanzerDivisionBOM 1 month ago
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- in regards to bicycles in the same way as they do with e.g. the environment, then large private businesses would spring up to drive around with trucks, collect unattended bicycles and resell them, and fascist ideologues and econometricians, masquerading as economists, would theorize about external costs and inherent failure in the bicycle market.
Cyclical consumption - the business cycle or "credit cycle" - is a sign of -
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PanzerDivisionBOM 1 month ago
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- what we might call intertemporal disequilibrium, and one cause of that - the major cause in the modern world, I would argue - is credit manipulation.
I think the gold standard would be a step in the right direction in terms of acheiving a sustainable, efficient structure of production, but it does not completely protect against the activities of central banks and other state agencies. It's not a panacea.
PanzerDivisionBOM 1 month ago
@PanzerDivisionBOM Cyclical consumption is not a credit cycle.
Cyclical consumption is a employee-consumer-employer relationships
It is the consumption that keeps employer in business and keeps jobs for employees.
And it need to grow exponentially by various reasons. The whole point of making profit is to sell more and more.
Doest matter if it is fiat or gold money. The same shitty mechanism apply.
shogu666 1 month ago
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@PanzerDivisionBOM "Surely if we ever do achieve some theoretical, absolute outer limits of human and technological potential..."
We are already at the resources limit closing in and environmental limit as we speak.
We consume more renewable resources yearly than earth can regenerate.
"Again:not inherent to the free market society itself,,"
wrong:cost externalization happens because of cost efficiency mechanism which is market
law - trying to deal with effects
shogu666 1 month ago
@shogu666
"Cost externalization happens because of cost efficiency mechanism which is market"
Then you mean something very different by free enterprise than I do.
I'm talking about private property rights, in the broadest sense, clearly defined and earnestly enforced, and the relationships which emerge from that institution. The exact forms that those relationships take, whether it be hierarchical or communal firms, trades or mutual gifts and charity, employment or -
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PanzerDivisionBOM 1 month ago
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- self-employment etc. are all circumstantial and incidental.
Our mixed economy holds some likenesses to what I would expect free enterprise to look like, but it does not fit the description, because it does not emerge from any consistent notion of private property.
I realize that this does not address your statements directly. I can make arguments from economic theory to support my contentions, but I would first like to establish what we're supposed to be arguing over.
PanzerDivisionBOM 1 month ago
@PanzerDivisionBOM What i meant is cost efficiency mechanism is compelling everyone to externalize the cost in order to stay competitive in a free market environment,
The more you externalize the better position you have
Even if everything was private the more you externalize the better your business is.
Hope i dont have to clarify that any further
shogu666 1 month ago
@shogu666
"What I meant [...] The more you externalize, the better position you have."
Yes, of course that is true. If you take some random person's car off of the street and drive away in it, and "externalize the cost" of that car to the person who bought it, then you're in a better position than you were before. If you "externalize the cost" of some random stranger's house by claiming it for your own and reselling it, then you're in a better position than you were in before. -
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PanzerDivisionBOM 1 month ago
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- Those things actually happen sometimes, but they are dealt with by the law as theft, fraud or vandalism. Property crimes. The law isn't necessarily good at handling even these cases mind you, but it's good enough to at least somewhat discourage these practices.
If the law granted categorical exclusions to automobile ownership, then don't you think we would see multi-million dollar multinational corporations crop up to exploit that? -
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PanzerDivisionBOM 1 month ago
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- Would we then call that "market failure", as well?
"No one created land and natural resources"
That's true of everything. As exposited by Locke and repeated by many, many others, including Murray Rothbard: man does not have the power of original creation, but only that of transformation. Still, we can have emergent criteria for homesteading, which can create consistent private property rights and allow a market process to take place.
PanzerDivisionBOM 1 month ago
@PanzerDivisionBOM Now to go back to trade example.
Today we have machines that can create 3000 corns and 1000 socks basically without human input.
Proper application of such a technology would make trade obsolete and create abundance.
Unfortunately it cant emerge out of monetary mechanics due very important law
* there more there is something the less its worth
Du it will be never profitable to supply for all demand so we will be stuck in everlasting scarcity.
shogu666 1 month ago
@PanzerDivisionBOM Now image the same exact mechanics apply to free market economy where competition is not a choice but necessity Having better position is a must if you want to survive there
What kind of values and incentives such a mechanics promotes ?
Liberals you dont understand that free market is an Utopian concept that based on values fallacy- they create opposite behavior than the one hoped for and there is no fixing it by law. Law doesnt work where $ are concerned
shogu666 1 month ago
@shogu666
"Having a better position is a must if you want to survive there"
What does that even mean? "Better" how, and better than what?
Are you saying that, if you had to barter for things without the aid of money as a medium of exchange, driving off in someone else's car would no longer leave you better off?
I once again feel I must question your conception of a free market society. I guess mine is sort of a nonstandard definition, but the one you propose seems defined by -
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PanzerDivisionBOM 1 month ago
- a complete absence of property rights. As in, I can grab anything I want completely without fear of any legal retribution, and any attempt by courts or police to defend your property against my theft is a violation of the free market. Do you understand that this is not the social order for which I am arguing? Do you concede that this implicit definition of yours is very different from what most mean by that term?
Even apart from that, even in our current, corporatist, -
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PanzerDivisionBOM 1 month ago
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- mixed economy, you still get rewarded for producing goods with less inputs, so long as the government doesn't object too strenuously. If there does exist this technology which allows you to produce the same goods with less input, then using it will allow you to underbid your competitors and make enormous profits.
Scarcity is a mere fact of existence. Human desires are infinite, resources are finite. Even in the Garden of Eden, every individual human being is still unique.
PanzerDivisionBOM 1 month ago
@PanzerDivisionBOM "Human desires are infinite,"
This is fallacy because even if that were true you still can only consume limited amount of stuff within 24hr period , and when you consume one thing you dont cosume other at the same time and not everyone is consuming the same thing at exact same time.
But is isnt, consumerism is a modern age invention.
shogu666 1 month ago
@shogu666 ermm... I suggest you read Economics in One Lesson. That is if you're open minded...
saintkatanalegacy 3 weeks ago
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@saintkatanalegacy "ermm... I suggest you read Economics in One Lesson. That is if you're open minded..."
I just got masters in economics.
All those theories are based of three very important and fallacious assumptions.
* That world is in constant state of Ceteris paribus .
* That Ultra perfect competition is happening.
* Exponential growth can be sustained forever.
Do i really need to explain why is that a fallacy ??
shogu666 1 week ago
@PanzerDivisionBOM "Even in the Garden of Eden, every individual human being is still unique."
Here we go again ideology more important than facts and logic. Somehow providing basic necessities of life for entire human population is making everyone equal. dah
Guess what no it isint !!! Even if we would create abundance of food that would not magically make everyone equal.
shogu666 1 month ago
@PanzerDivisionBOM What does that even mean? "Better" how, and better than what?
Better then your competition. If you get out competed you go broke and lose income which means everything because it is your access to resources and social status.
Again values and incentives are very negative.
"I guess mine is sort of a nonstandard definition"
Nope you just dont understand what you are advocating
shogu666 1 month ago
@PanzerDivisionBOM If i understand correctly your argument is that cost externalization exists because not everything is private ???
Fuck hope that never happens i wonder how long for basic resources to be monopolized.
Beside this would be immoral because no one created land and natural resources ,nature did. Owning them for sake of owning is direct insult towards rest of mankind especially those unborn yet.
Beside you missed the point of my argument
shogu666 1 month ago
@PanzerDivisionBOM If i understand correctly your argument is that cost externalization exists because not everything is private ???
F**k hope that never happens i wonder how long for basic resources to be monopolized.
Beside this would be immoral because no one created land and natural resources ,nature did. Owning them for sake of owning is direct insult towards rest of mankind especially those unborn yet.
Beside you missed the point of my argument
shogu666 1 month ago
This has been flagged as spam show
@PanzerDivisionBOM If i understand correctly your argument is that cost externalization exists because not everything is private ???
F**k hope that never happens i wonder how long for basic resources to be monopolized.
Beside this would be immoral because no one created land and natural resources ,nature did. Owning them for sake of owning is direct insult towards rest of mankind especially those unborn yet.
Beside you missed the point of my argument
shogu666 1 month ago
@ValentinN84 I agree on the principal that we are 100% depended on other people and trade was the way of distributing stuff. But this concept assumes perpetual scarcity which is not necessarily longer the case .
We have technological understanding to create much more than we can consume through means of automation which render trade obsolete.
Unfortunately status quo requires trade in order to sustain cyclical consumption thus abundance will not emerge out of free market policy
shogu666 1 month ago
Fritz is going that ad superb pesticides into his corn production so he can get more profit.
From now on everyone will east juicy healthy corn that will keep their bodies healthy and free of toxins.
Lou is going to use cheaper material that is not so obvious to the Fritz and socks gonna break after 5 years rather then 10 years so socks will need to be re-bought faster
Nice wealth created indeed.
Cartoon concepts are for children !!!
shogu666 1 month ago
@shogu666 No, because now Oscar will come along, and create socks that are more valuable to consumers (including Fritz). If Lou's socks are not good enough, Oscar's will be, encouraging quality products because of the competition between different entities. It's capitalism at it's best, and wealth is created in the process.
"Cartoon concepts' are just another way to explaining things. But hey, if you rahter read 800 pages of boring words, go for it. The message is still the same.
doubleOR1 1 month ago in playlist Favorites
@doubleOR1 That only works in theory.
Oscars socks and much more expensive thus not many people will be able to afford, because there is no unlimited purchase power at any given time around. Pretty much what is encouraged is low quality socks while only certain individuals can afford "normal" socks designed to last.
And it is only assuming that entry barriers are low enough for Oscar to enter the market and Fritz will stick to fair competition which never happens when $ are at stake
shogu666 1 month ago
Lou is being exploited because he only gets to make 25 of the nation's socks while Fritz gets to control 1,000 of the nation's corn production.
So, to make it fair, Fritz's production would be divided evenly between him and Lou, leading Fritz to lose interest in maintaining all the innovations and efficiencies he had developed previously and then both would only produce 25 units each and they would finally become equal and live happily ever after in their primative Socialist utopia.
gilbet 1 month ago in playlist Favorites
What if lou and fritz's currencies are different?
Salvysahagun 2 months ago
@Salvysahagun In this case they are not using currency, they are directly trading a good for a good. The principle still holds if you use currency. Trade doesn't just mean international trade. You do not have to sew your own clothes or raise chickens in your home. You specialize in what you are good at and use money to buy everything else you need for cheaper than it would cost for you to do it yourself. Money makes this process easier.
Duke1839 2 months ago in playlist Favorites
@Duke1839
Currency is based on the goods produced and denominated. Therefore Currency should be factored into trade
Salvysahagun 2 months ago
It should be "Lu"
chlevell 2 months ago in playlist Favorites
They should have just named them "Hayek" and "Mises", and then mentioned that they were real people. Why not add exposure for them instead of disguise them....they are some of the few economists that actually get it right!
maverick18436572 2 months ago in playlist Favorites
Gobal total wealth increases whenever labor is involved in producing a product. Labor is intangible but it is very much a trade-able item. The best example of this is the production of software. Unlike a sock or ear of corn, computer software is intangible and is primarily created through labor. Whenever computer software, an app, movie, game, etc., is created, total wealth in the world goes up! (The pie gets bigger). If people are smart, they trade that which they create best.
Draanor 2 months ago in playlist Favorites
But socks and corn don't come from nowhere. There has to expenditure to someone else to produce them, and this video suggests that expenditure can be lower for these two cartoon guys. Thus the total wealth ceated is still the same regardless of how they slice up the pie between them and those they pay to help create the socks and corn.
stevo728822 2 months ago
@stevo728822 The two cartoon guys do have lower expenditures. Wealth is created from less to more, not nothing to something. Sure there is expenditure involved in the production, in this case the farmers need a few things for production (expenditures), land, seeds, water, tools and labor. The wealth is the new product, that is the production of wealth and it costs them less in expenditures than they receive in sales (the difference being profit - which drives them to produce more).
therotaryrocket 2 months ago in playlist Economics Playlist
@therotaryrocket Your maths is based solely upon these two guys....there are other people involved as well...if these pay less...someone else gets less. Yo7u have to think of the whole system, not just a subset of it.
stevo728822 2 months ago
anyone who believes this rank oversimplification is a right-wing idiot. Really, Lou and Fritz just produce all that shit themselves? On land that I suppose was given to them by baby jesus? Who knows what they pay those animals that do the actual "value adding" in the development of whatever resources Fritz and Lou "own" But you know "its made of win, bro" sweet.
cyrus79100 3 months ago
@cyrus79100 Cyrus Fail.
doofus8812 2 months ago
@doofus8812 I was with him until he started saying animals should be paid wages.
hexzerg2 2 months ago 2
@hexzerg2 You. You I like.
doofus8812 2 months ago
It is impossible to create wealth without creating a speculative bubble. That is because wealth obtains its value from scarcity. If there are more units of wealth, then there is less scarcity, and so the units of wealth themselves lose value to compensate. If you try to increase demand (advertisements, media, etc.) then you create a bubble that is bound to collapse sooner or later.
This is similar to why you cannot simply print money or synthesize gold to create wealth.
kDest 3 months ago
@kDest the point in the video was that by specializing we can be more productive, he wasn't saying trade creates wealth out of nothing, trade leads to higher production which in turn creates more wealth.
fruiteo 3 months ago
@fruiteo
>>trade leads to higher production which in turn creates more wealth.
But again you are using the wrong verb. Creation never happens, trade must mean that someone loses wealth so that you gain it. Even with higher productivity, a surplus of wealth must mean that for the wealthy population, the units of wealth have less value due to their saturation.
kDest 3 months ago
no one wins when all you have is socks and corn.
lolnickfox 5 months ago
@lolnickfox Lol
mikebgood 4 months ago
Lou is really slacking on his sock and corn production...wtf
lolnickfox 5 months ago
This comment has received too many negative votes show
Made of win?
Fucking right winged idiots and their pathetic attempts at using internet memes.
mecher3k 5 months ago
@mecher3k they're moderate shithead.
Cannedscourge 5 months ago
@Cannedscourge
Lol, so their moderate idiots who are epic fail at using internet memes.
mecher3k 5 months ago
@mecher3k How is this video at all related to "right winged idiots"?
Vladimus44 5 months ago 2
@Vladimus44
Apparently anyone familiar with the law of comparative advantage is a right wing idiot.
RonDukeSilverSwanson 5 months ago 2
@mecher3k If you disagree with the video then please point out where it was wrong. Until then keep your mouth shut and try to learn something.
mikebgood 4 months ago
@mikebgood
No need to, besides you free market idiots are as deluded as creationists are.
mecher3k 4 months ago
@mecher3k
Why is there no need to support what you say with evidence?
ElJefer 4 months ago
@ElJefer
Google.
You are too retarded to understand a simple concept. That being it takes a lot more time to debunk something.
Also retards using internet memes automatically equals fail.
mecher3k 4 months ago
@mecher3k
You keep making claims without supporting them with arguments.
ElJefer 4 months ago
One of the basic rules of economics is that when a good is subsidized it distorts normal competitive processes and allows faulty, inefficient and expensive goods produced by incompetent producers to take over the market cost us all more in the long run. In the market of ideas there is one good that is very heavily subsidized. The idea that corporate capitalism is an unalloyed good. Every media venue is now filled up with subsidized apologists for greed clogging up legitimate discussion.
michalchik 5 months ago
Adam Smith would definitely regret writing his foolish book if he saw the reality today. The fact is, the idealized notion comparative advantage and free trade ignores the employment issue of a country. People rely on jobs to gain money, which in turn enables them to buy goods, and which in turn creates demand, and which in turn enables the creation of wealth. If people have no jobs, then what good are the notion of free trade and comparative advantage? There is no free lunch in this world.
stephentsang2000 6 months ago
@stephentsang2000 this theory that this guy explains applies to everything in the economy, the economy is based on trade. employment is simply a form of trade. you trade your labor, the employer trades a wage. if people don't have jobs, it's because either the employee or the employer does not want to engage in the trade at the established exchange rate. the most part it's employers, which is why as keynes explained wages need to drop to restore unemployment.
Welsh77 6 months ago
@Welsh77 And when the assumptions turn out to be wrong, all hell breaks lose. Did you ever seen benevolent bankers or generous misers? Talking about comparative advantage and free trade in fiction is okay, but putting it seriously into real life scenarios is like talking trash.
stephentsang2000 6 months ago
@stephentsang2000 our problem is not with this model or with free trade, its more with the massive money supply and the monopoly that a very small number of people in the fed and large banks have on it. we don't promote competition in the issuing of currency and lending industries, that's why we have the problems we have, NOT because voluntary trade doesn't create wealth. the government is too powerful, if we restricted its power we'd be better off
Welsh77 6 months ago
@stephentsang2000 the minimum wage often interferes with this correction for the poorest and most unskilled members of society, rendering them jobless. this theory is sound and it applies in every way shape and form to today's economy. he explains what voluntary trade does: create wealth. he doesn't explain that involuntary trade, specifically between taxpayers and the government in times of recession when stimulus occurs, transfers wealth, imposing an opportunity cost on the tax payer
Welsh77 6 months ago
@stephentsang2000 of the wealth that he could have reaped from using those resources to voluntarily trade them elsewhere. this theory does not imply a free lunch. you make the assumption that it doesn't take any effort to find trading partners and establish an exchange rate satisfactory to both. in today's world, this is EXTREMELY difficult because of the barriers to free trade and the barriers to exchange rates that are imposed on our society.
Welsh77 6 months ago
@Welsh77
In an idealised situation like the corn state and the sock state, the original corn farmers or sock workers were kicked out of their corn fields or production lines and became unemployed. If these surplus work forces were not able to be absorbed into any newly "invented" jobs, then they will have no money and there will be a contraction of demand for goods. This will lead to contraction of supply and less wealth is created. Agree?
stephentsang2000 6 months ago
@Welsh77
Free Trade & Comparative Advantage would true for creating more wealth, if and only if the surplus redundant workforce of both countries were able to be absorbed into newly "invented" jobs. Get what I mean?
stephentsang2000 6 months ago
@Welsh77 And for this reason, Asian governments don't believe in these Western shit. Some Chinese provinces even impose high tax for purchasing of new construction machineries, because absorbing more "man power" into the building industry is more important than automation. Machine efficiency (comparative advantage over man power) creates more wealth for the employers, but less wealth for society as a whole because of unemployment and the subsequent contraction of demand.
stephentsang2000 6 months ago
@stephentsang2000 you completely underestimate the abililty of people in the capitalist system to find new uses for themselves. capitalism is not perfect, obviously some people will not be able to find a job. you imply that this hasn't always been the case, but it has. it's not a new obstacle just because of machinery and technology. what capitalism does BEST is recycle the labor force, when it is allowed to. what i just explained is capitalism is seldom allowed to recycle labor because
Welsh77 6 months ago
@Welsh77 yeah, you are correct for if you are living in a idealized scenario in which all those "surplus workforce" are as smart as Bill Gates in finding their new way integrating into the production force under the circumstances that they could sustain their living during their "no body knows how long it would take" quest. Just take a look around this world and you will understand a theory is true if and only if the necessary assumptions are there.
stephentsang2000 6 months ago
@stephentsang2000 of government intervention. steve forbes wrote "capitalism: a true love story" in which he explains that capitalism doesn't run on greed, but on entrepreneurs by their wit finding new things that people want, and providing them. products only exist because there's a demand for them, but you can't assume everyone knows all the possibilities of what they demand, because not all of them have been invented yet! entreprenuers come up with new ideas, and then once offered
Welsh77 6 months ago
@stephentsang2000 some people say "i want that!" other times they dont, and the product/service leaves the market. this is say's law, demonized by keynesians that supply creates its own demand. but that's not what it says, and its important in understanding how free markets work. it doesn't seem to have any application today because there are SO MANY disincentives for entrepreneurs to propose these new ideas. high taxes, weak patent laws, barriers to trade, and anti-competition policies
Welsh77 6 months ago
@stephentsang2000 drive these people away from using their wit in a way to promote their self interest, which at the same time promotes the interest of everyone who wants their new creation. you simply don't understand how a free market works, or the incentives that it's supposed to have for its dwellers. by saying that a contraction of demand will lead to a contraction of supply, you evidence this. supply and demand are INDEPENDENT, one never has in influence on another. ask any economist.
Welsh77 6 months ago
@stephentsang2000 i find it ironic that internationally, china is PURELY CAPITALIST. ask any marxist, they'll tell you china is. they engage in trade with other countries freely, because they know they can't control the whole world and that not being capitalist would put them behind. its only domestically that they impose the controls you're talking about, and look at the results. you question the principle of creative destruction in a free market. you shouldn't, the govt is impairing it.
Welsh77 6 months ago
@Welsh77 what i mean by my last comment is that china flourishes internationally, they benefit alot because of the trade they engage in. yet domestically, their economy is weak. by highly taxing machinery, they provide obstacles to people to create new products and services, or invest in anything that might generate them a return. this seems like common sense to me, but i guess not to others. capitalism has helped more people than any other system, i dont know why we strive for its truest versio
Welsh77 6 months ago
@stephentsang2000 lack of demand does not create recessions by the way either. that's the biggest keynesian fallacy of all. its the easy money that we have that creates no incentive for anyone to save anything. if people had to consume less when they took out loans, there wouldn't be runaway artificial demand that all of a sudden dies when interest rates rise. demand is not the root of the problem, money and how it influences peoples expectations is. keynes was just wrong.
Welsh77 6 months ago
@Welsh77 I don't care what Keynes says. Many things in this world takes only common sense to understand.
if money could not be channeled into the hands of individuals (thru unemployment), but concentrated in the hands of those of have comparative advantage, and lead to the subsequent decline of total demand and subsequent decrease of production (wealth creation), then what good is it?
stephentsang2000 6 months ago
@stephentsang2000
Agreed. Jobs are more important than production. The best way to fix the economy is to put people to work. We should build the great pyramids of the united states, and do it by hand with no cranes, tractors, or machines. That way we could employ MILLIONS of people. We would have zero% unemployment and we would be the wealthiest nation in the history of the world!!!
We should pay the pyramid workers $100/hour too. Think of all the DEMAND that would create!!!
FartyFace 6 months ago
Haha, dumb economists of the West thought that this could create more wealth, but ignores the fact that how such created wealth could be channelled into individual's hands. The sock factory workers in corn producing countries would lose their jobs, part were absorbed into the corn fields, but majority of them have no money to buy anything because of umemployment. The demand for socks and corn drops because of people getting poorer, and eventually less supply, and less wealth is created.
stephentsang2000 6 months ago
@stephentsang2000
Agreed. This is why we need to destroy all factories that use mechanical production. All machines and technology that take jobs away should be banned. Producing goods by hand with no machines creates lots of jobs. Why let a machine build a car when you can hire 100 people to make it by hand? If we destroy enough technology we could have zero % unemployment. Everyone would have a job!
Think of all the demand these workers would create!!
FartyFace 6 months ago
@FartyFace Believe it or not some people actually agree with your satire. I was watching 60 minutes the other night and Lesley Stahl was interviewing the CEO of GE. Not to get into a discussion about GE, but Stahl actually complained that there was too much automation in the GE production process. I just shake my head and wonder how this kind of economic illiteracy still exists in America, then I remember how many people benefit from the ignorance.
mikebgood 4 months ago
@thereisnofirmament Any labor unions that exist are completely voluntary and there are no laws requiring you join one unlike the United States, and Singapore has no minimum wage while Hong Kong passed their first ever minimum wage law in 2010. I define success as a mixture of GDP growth, GDP per capita, Income per capita relative to cost of living, and their standard of living. Hong Kong has a considerably high standard of living and massive GDP growth per capita.
ThaFreeMind 6 months ago
@thereisnofirmament Uhh Hong Kong has a flat tax on land i believe and no income tax, Singapore could but it has been known for its lack of a saftey net so I doubt your claim however you cannot claim their success is from welfare programs.
I dont support large corporations all of the time I support Free Markets where there always exists options
ThaFreeMind 6 months ago
@thereisnofirmament Oh, well. Thanks for having this discussion with me.
studentofsmith 6 months ago
@thereisnofirmament Gross assumption to gross assumption to gross assumption...Do you catch the drift of your statement? Hong Kong and Singapore never had these massive labor movements you speak of yet they have the freest most advanced economies and skilled work forces in Asia with the highest per capita income in their respective regions to match. You act as though having a govt. telling you when you can and cannot work and for how much with no consent of your own is a good thing.
ThaFreeMind 6 months ago
@thereisnofirmament no, i didn't read wikipedia, the quote i gave you is in book one, chapter six, verse 7. i dont see a point in continuing this discussion, you were already dead wrong on smith arguing for everyone to be self employed, which any ape that reads his book knows isn't true. based on that claim i know you have not read the book, it is obvious that you are just grabbing random quotes. smith did not believe LTV was a sufficient explanation for value in modern economies.
Welsh77 6 months ago
@thereisnofirmament you clearly have no idea what you're talking about, and have not read the wealth of nations, in which adam smith states that for advanced economies: "The whole produce of labour does not always belong to the labourer. He must in most cases share it with the owner of the stock which employs him." - so smith did not believe solely in self employment. an economy run on self employment would be primitive. you are confusing smith with ricardo, smith did not believe in the LTV.
Welsh77 6 months ago
@thereisnofirmament if profit wouldn't exist in the labor market under competition in adam smith's model, why would employers ever hire anyone? who is going to hire someone if they dont make money off of them? the claim that exploiting labor is what profit is directly based on marx's theories of surplus value and his labor theory of value. you can't support adam smith and competition if you believe exploiting labor creates profit, and that profit is a bad thing...
Welsh77 6 months ago
@thereisnofirmament Correction, we have overpaid unskilled jobs because of the union struggle. The reason many jobs are paid higher is because of supply and demand with specialization and the degree of education, compared to GM and Ford janitors who because of the "union struggle" were making $25/hr.
ThaFreeMind 6 months ago
@thereisnofirmament If we include firms with 5,000 or more your choice of emloyers increases from 981 to 1,956.
You have said there are only a "few" employers and that we have very limited choice. In my eyes 1,956 potential employers are more than a "few" and offers a great deal of choice - but I guess we're just different people.
studentofsmith 6 months ago
@thereisnofirmament In 2008 there were 981 firms with 10,000 employees or more in the U.S. These firms combined employed about 27% of all employees. That, in my estimation, would be enough to manipulate, but not control, the overall labour market.
The trick, obviously, would be getting all these firms to cooperate. We might have better luck if we tried to corner the market on a specific type of labour.
Just try building any large construction project without the Teamsters.
studentofsmith 6 months ago
@thereisnofirmament A market is competitive when there are multiple buyers and sellers such that no one is "the only game in town" or comprises a sufficently large share of the market to manipulate prices. Some labour unions, aidied by legistlation, comprise a sufficently large share of some types of labour that they can (and do) manipulate those markets.
Can you point to any examples of buyers having that kind of collective bargaining power in the labour market?
studentofsmith 6 months ago
@thereisnofirmament I would beg to differ.
No, that is incorrect. If our standard of living was due to public intervention the Soviet Union would have been a utopia and Cuba would be the main attraction of the world. The reason our standard of living is so high is because of our capitalist system providing relatively high paying jobs to the majority of our population. As crony as the system is with thousands of tax "giveaways" subsidies and regulations, it still works fairly well.
ThaFreeMind 6 months ago
@thereisnofirmament
So how did Bohm Bawerk fail in his critique of Marx?
rockandrock44 6 months ago
@thereisnofirmament According to the International Franchise Association about 18 million people are employed by franchises in the U.S. Assuming all franchise outlets employ less than 100 people we can subtract that from 41 million to get 23 million employed by non-franchised small businesses. Now add in the 15 million who are self employed and out of a total workforce of 134 million, 38 million, or 28% do not work for a franchise or big business. There's still a place for entrepreneurship.
studentofsmith 6 months ago
@thereisnofirmament
The Austrians failed at taking on Marx? How so? Have you read Bohm Bawerk's critique of Marx?
And I call BS on your claim about recessions - many generally pro market economists are not Austrians.
rockandrock44 6 months ago
@thereisnofirmament
Newsflash: Communists and Marxist Economists are seen as crackpots by most economists too, so I wouldn't be talking.
rockandrock44 6 months ago
@thereisnofirmament This discussion is about your options for making a living, specifically your options as an employee. I have tried to point out the diverstiy of independent businesses as evidence you have many options. You have countered that most, if not all, of these businesses are ultimately beholden to the richest 10%, our real employers.
I would like to point out that 10% of the (U.S.) population is still 30 million people. That's a lot of potential employers.
studentofsmith 6 months ago
@thereisnofirmament Let's assume this statistic is correct, this still means that 50% of the banks were indeed making mandated risky loans. On top of all this you have the privatized profit mixed with socialized risk which is an absolute failure on so many levels and if you do not know what I am talking about you should not be debating me.
Also, I enjoy how you bash bush at the end as a little cream on the top. Really? Friedman? Hayek? Von Mises? All insane to you? Wow you have redefined sanity
ThaFreeMind 6 months ago
Growing a garden or building a computer does not create wealth! Someone please take econ 101 before commenting! If everyone is allergic to vegetables, and you are surrounded by cavemen, growing gardens nor building computers produces wealth! What produces wealth is the want or the need for a service or product. Putting crap on a stick is a production of wealth if someone wants it. Therefore, the more the want or need is the more it is worth, and the less there is of it the more it is worth.
jmihalko 6 months ago
@thereisnofirmament This discussion is about control over the means of production, not the accumulation of wealth. Your '10% owns 80%' is not central to our discussion.
Most franchises operate under their own ownership and management and for their own profit. They should be considered independent businesses. But even if we exclude them we still see about 40% of employees working for small, non-franchised, businesses as franchises account for 13% of all employment in the U.S. (Census Bureau)
studentofsmith 6 months ago
Wow, what a load of crap. The idea that evolved in "economics" evolved by tea-baggers, not real economists. This is economics for the retarded. Yes, two people can trade with each other and both can get wealthy but if each person is a monopoly, how is price set? The two people that are corporations will trade between themselves at the lowest possible value but will inflate the price for their workers, which is why there are laws against monopolies. Do yourself a favor and take a real econ course
jmihalko 6 months ago