Economics: I, Pencil

[shanek]

OK almost perfectly , or better than any alternativest hen. At least I don't remember you've ever admited any significant problems with libertarianism or any area where state intervention might do good (with the exception of those areas dictated by libertarian dogam of course).

Oh, beautiful! "With the exception of the things you say government intervention is proper, you've never mentioned any area where government intervention is proper!" And you try and do this by defining the former as being "libertarian dogma."

(See, technically I should have typed "libertarian dogam" (sic), but apparently you're really sensitive about this kind of thing. But it's not "jumping on someone" when they do that. It's just what you properly do when quoting someone who has made a typo or grammatical error.)

Assuming that what you say is true, and you haven't provided any evidence other than your word for that,

I have provided sources. Check them out.

In some cases.

Oh, okay, so why don't you tell us when cooperation is good and when it's bad? Keeping in mind that the definition of "cooperation" requires all involved parties to be participating voluntarily.

Thanks for once again demonstrating the Hasty Generalization fallacy, but we got it the first time you used it.

Well, this is new—calling a real-life example a "hasty generalization" instead of the old and tired "anecdote." I gave an actual, tangible, verifiable example of these anti-trust laws harming the consumers rather than helping. They're being applied, not to benefit consumers (who really have no lobby in Washington), but to benefit politically-connected corporations and allow them to have even more power than they would in a market with no government intervention. How could it be otherwise?

Nice example of selection bias too.

Yeah, right. And you can't even, no matter how many times I've requested it, provide one verifiable example of this working the way it's claimed.

 

[Kerberos]

You have to look at things in context. Hence my clarification paragraph. Did you not notice the quote thingies?

Feel free to include as of the surounding text as you like to prove that it means something different.

Uh, hello? That's the definition of market equilibrium—of all types!

Nop.

That's simply a different placement of the supply (marginal cost) and demand (benefit) curves. And I have been saying that from the very beginning!

Simply not true, the equilibrium is where marginal revenue meets marginal expenditure not where marginal benefit meets marginal costs.

There are two ways of viewing market equilibrium: macro- and micro-. We are discussing macro-, so you discussing micro- is inapproprate. With micro-, you look at individual firms and consumers. You use macro- when you're discussing things market-wide. Competition, at least in the context we're discussing it, is a market-wide effect.

As I said my books include markets in mikroeconomy, and in any case the distinction is blury. All this is irrelevant waffling however since the is no "makro-sektion" that supports your position.

How is this in any way inconsistent with what I've said?

Ditto with the others. I await your explanation.

Because not all markets have flexible prices and many traders nor do the other conditions prevail universally as your link clearly indicates.


Now why do you refuse to adress theese? It couldn't be because you know you're wrong would it?

Thanks for killing the big nasty straw man, I feel much safer now. Having perfomed this heroic deed, would you mind answering my question instead of quoting me out of context?

Having looked forward in the thread I see that you apparently claim that anybody who argues against you, thinks that your inability to provide plausible solutions to problems we raise with libertarianism, proves that no solutions exist. The pencil does indeed slay this mighty straw man.

Originally posted by me
http://dictionary.reference.com/search?q=common sense
"common sense
n.

Sound judgment not based on specialized knowledge; native good judgment."

Not all skepticism must be based on specialized knowledge. Or perhaps it is sound judgement that you opose - that would explain sooooo much.

 

[Kerberos]

I didn't do that and you know it! I called you on applying microeconomic concepts to macroeconomic explanations! The only mention I even made of it is when I quoted you directly and put (sic) next to it, which is what you're supposed to do in such situations!

And you accuse me of behaving like a 10-year-old? A 10-year-old shows more responsibility and forthrightness than you're doing here.

BS, you only qouted that single word, if your purpose had been to quote me then you would have quoted more, quoting that single word was meaningless.

 

[Kerberos]

Oh, beautiful! "With the exception of the things you say government intervention is proper, you've never mentioned any area where government intervention is proper!" And you try and do this by defining the former as being "libertarian dogma."

Which it is

I have provided sources. Check them out.

Could you repost them?

Oh, okay, so why don't you tell us when cooperation is good and when it's bad? Keeping in mind that the definition of "cooperation" requires all involved parties to be participating voluntarily.

It's good when they cooperrate to increase efficiency, it is fx bad when a bunch af driving instructors try to fix prices and then try to drive a driving instruktor who won't join the kartel out of the market by various methods like fx tell the owner of a driving relay that they'll all stop using that relay unless he stops renting his relay to the instructor who isn't in the cartel.
http://www.cfje.dk/cfje/Lovbasen.nsf/ID/LB02270521?OpenDocument&Print
(Danish)

Well, this is new—calling a real-life example a "hasty generalization" instead of the old and tired "anecdote."

Hasty generalizatioon isn't the same as an anecdote.

Yeah, right. And you can't even, no matter how many times I've requested it, provide one verifiable example of this working the way it's claimed.

There was an illegal cartel around electricityinstalation in Denmark that was discovered in 1998. The Danish competition department estimates that this lead to an increase in prices of 12 % and prices did drop 10% after the cartel was dispanded.
http://www.ks.dk/publikationer/konkurrenceredegoerelsen/baggrund/kap3-rev.elkartellet/ (Danish too)

 

[CFLarsen]

There was an illegal cartel around electricityinstalation in Denmark that was discovered in 1998. The Danish competition department estimates that this lead to an increase in prices of 12 % and prices did drop 10% after the cartel was dispanded.
http://www.ks.dk/publikationer/konkurrenceredegoerelsen/baggrund/kap3-rev.elkartellet/ (Danish too)

I can confirm this. There was also the case of TARCO, also in Denmark. Same thing.

Shanek will probably dismiss these examples, because Danes are, by default, biased (because they show evidence that destroys shanek's argument).

 

[Thanz]

I skimmed some of this thread, so I apologize if this has been mentioned before. I just wanted to post a couple of examples of collusive behaviour in the marketplace by large firms acting in concert with each other.

The first is the vitamin and food additive industry. The main players in the industry carved out sections of the world, agreed not to compete with each other in designated zones, and set world prices for products. They even had meetings in which executives referred to their competitors as their friends and customers as their enemies. Here is a link: http://www.cbc.ca/consumers/market/files/health/vitamins/

The second is in the meat packing industry. There has been a lot of consolidation in the meat industry which has led to the market resembling an hourglass - lots of cattle producers at the top, lots of consumers at the bottom, but only a few firms in the middle. Those few firms have immense power to squeeze both the cattle ranchers and the consumers to extract the most profit, and they do through various anti-competitive measures. I highly recommend the book Fast Food Nation in this regard, which is more about economics and the effects of the fast food industry than about "fast food is bad for you".

 

[shanek]

There was an illegal cartel

Cartels are not part of the free market; they can only exist with the support of government or organized crime. Since you say this one was illegal, then that would be organized crime.

Try again.

 

[shanek]

The first is the vitamin and food additive industry...The second is in the meat packing industry.

This just shows the lengths to which these people labor for criticisms. People willingly bought those products at those prices, did they not?

I highly recommend the book Fast Food Nation in this regard, which is more about economics and the effects of the fast food industry than about "fast food is bad for you".

Fast Food Nation is a woo-woo tome on the level of The Jungle and has been debunked for quite some time. Schlosser himself sang the praises of "scientific socialists" in the back of the book, and ignores the fact that the fast food industry is heavily regulated by both the government (federal, state, and local) and by consumer activists (read: busybodies). And he just doesn't get one very basic fact: the fast food industry exists and makes money by giving people what they want. It feeds on the "it's not my fault" mentality and almost certainly played a role in the recent trend of fat people suing the fast food restaurants. That someone who purports to be a skeptic highly recommends this worthless and silly book is just astoundingly sad.

 

[shanek]

Well, well, well, the Heritage Foundation has just released their "Index of Economic Freedom," a list of the most economically free countries, for 2005 (covering the year 2004).

First, a bit of a reminder from earlier in this thread: After I had said that Hong Kong (along with the other East Asian Tigers, Singapore, Taiwan, and South Korea) achieved its growth with economic freedom, Claus the Pseudo-Skeptic came back with, " That is completely wrong. You need to read some economic history. These states subsidized firms, protected infant industries, encouraged innovation, provided export incentives, provided cheap capital, etc.," that their policies were "[h]ardly "free market practices," that " the East Asian Tigers proves that it takes government control to create an economical miracle," that "the East Asian Tigers did not see success because of a free market. On the contrary, they saw success because of heavy government control," that "they don't have a free market," and asked "Why did the East Asian Tigers become an economical success with heavy government support?"

Well, gee, let's see, what country ranked #1 in the Heritage Foundation's Index, and has at least since 1995?

http://www.heritage.org/research/features/index/country.cfm?id=HongKong

Hong Kong

• Rank: 1
• Score:1.35
• Category:Free

Hong Kong remains the world's freest economy. It is a free port with no barriers to trade. It has simple procedures for starting enterprises, free entry of foreign capital and repatriation of earnings, and transparency, and operates under the rule of law...Hong Kong is basically duty-free. There are no quotas and no antidumping or countervailing duties. Licenses are required for few products, but issuance is very fast...Based on data from the International Monetary Fund, the government consumed 10.53 percent of GDP in 2003...From 1994 to 2003, Hong Kong’s weighted average annual rate of inflation was –2.61 percent...Among all the world’s governments, Hong Kong’s is one of the most receptive to investment and does not discriminate between foreign and domestic investors...Hong Kong’s market largely sets wages and prices, although price controls are imposed on rent for some residential properties, public transport, and electricity. There is no minimum wage for local employees; however, the government does impose a minimum wage on imported workers, including foreign domestic helpers...The government of Hong Kong fully protects private property rights. According to the U.S. Department of Commerce, "The local court system provides effective enforcement of contracts, dispute settlements and protection of rights...Hong Kong’s legal system is firmly based on the rule of law and the independence of the judiciary."

What was #2? Well, it was Singapore, with a score of 1.60.

Still hanging on to that completely BOGUS claim, Claus, or are you going to be a good skeptic and admit you were wrong?

 

[The Central Scrutinizer]

Still hanging on to that completely BOGUS claim, Claus, or are you going to be a good skeptic and admit you were wrong?

Speaking of which, are all banks required to be members of the Federal Reserve? Or are you wiilling to state for the record that you were wrong?

 

[Kerberos]

Cartels are not part of the free market;

BS.

they can only exist with the support of government or organized crime.

More BS.

Since you say this one was illegal, then that would be organized crime.

For which you have no evidence other than your dogma.

Try again.

Yes do, and try providing something better than your dogma to back up your position.

 

[Thanz]

This just shows the lengths to which these people labor for criticisms. People willingly bought those products at those prices, did they not?

Because they did not have a choice. The major players agreed not to compete in certain markets. If you wanted food additive X, you could only get it from whatever company got that region at the price that had been agreed upon by the collusive sellers.

The meat packing industry is more complex. Beef is sold at auction, but on some days 80% of the beef sold is captive supply, so the prices are meaningless. On other days only one of the major companies will show up to bid. NO competitive bids = no competition = lower prices and more profits for beef packers, less money for ranchers.

Fast Food Nation is a woo-woo tome on the level of The Jungle and has been debunked for quite some time. Schlosser himself sang the praises of "scientific socialists" in the back of the book, and ignores the fact that the fast food industry is heavily regulated by both the government (federal, state, and local) and by consumer activists (read: busybodies). And he just doesn't get one very basic fact: the fast food industry exists and makes money by giving people what they want. It feeds on the "it's not my fault" mentality and almost certainly played a role in the recent trend of fat people suing the fast food restaurants. That someone who purports to be a skeptic highly recommends this worthless and silly book is just astoundingly sad.

Have you even read the book?

 

[shanek]

Because they did not have a choice.

That's just a load of crap; it violates every known principle of economics and is part of this modern whiney responsibility-avoiding "It's not my fault!" mentality. You always have a choice. Rockefeller, even with his dominance in the market, found out the hard way: price gouging doesn't work.

The major players agreed not to compete in certain markets.

But if they tried to price their products beyond the competitive range then the minor players would have stepped in and given them a run for their money.

Have you even read the book?

A couple of years ago, when it first came out. It's just pandering to the economically ignorant and to people who don't want to take responsibility for their own choices. And they are choices. I had a summer job at Burger King way back in '87 and they were selling salads and other healthier alternatives way back then. People are buying the burgers and fries because that's what they want!

 

[Thanz]

That's just a load of crap; it violates every known principle of economics and is part of this modern whiney responsibility-avoiding "It's not my fault!" mentality. You always have a choice. Rockefeller, even with his dominance in the market, found out the hard way: price gouging doesn't work.

Look, it simply doesn't matter what principles of economics you think it violated. It happened. They colluded, divided up the world market, and fixed prices for 10 years. They pleaded guilty. It happened. It is not about a whiney "it's not my fault" mentality - it was about an abuse of market power. You should be against it - it is an application of force.

A couple of years ago, when it first came out. It's just pandering to the economically ignorant and to people who don't want to take responsibility for their own choices. And they are choices. I had a summer job at Burger King way back in '87 and they were selling salads and other healthier alternatives way back then. People are buying the burgers and fries because that's what they want!

It's about so much more than that. I must question whether you have actually read it. I just finished it and cannot believe that anyone could sum up the book in this way.