Economics: I, Pencil

shanek said:
No, I don't. If such wood is commanding such a price, then there's an incentive to plant more of it and make sure it grows to be profitable, and continues from there.

Did you learn nothing from the pencil?
No, I didn't learn anything from the pencil. The pencil is not Brazilian rosewood, it is not elephant tusks, etc. I'm just talking about what is happening in the world. Species are being hunted to extinction for bush meat, for panelling in executive offices, etc. Some groups take an enlightened self interest and moderate consumption, as you note. In that case, I agree, government should keep well away.

But it's simply fact that not everyone is doing that. A parable about a pencil does not change that fact.

Okay, I really am gone now. Let me know when you present a lecture at a GAL convention of sustainable instruments woods, or otherwise get published among a company of peers, and I'll be all ears. Until then, I'm going to pay attention to the experts in the field, not the googlers.
 
But, but, what about my point?

A bud of mine who worked for a "major food manufacturer" (since promoted:D) was called upon to testify in the UK when the bloody Brits sensed something amiss. Nothing ever happened, as far as I know. It easy to snow people. Unfortunately.

It is also very well known within the food industry. In fact pricing strategies were based specifically on this.

I started working in the whoreho...uh, marketing in '76, it 'twas. It was the case then. And it sure as hell was the case a few years ago. These "market forces", need a while to gestate, do they?

You know, this is a bit like discussing something with Ian. Theory with him trumps data every time.
 
shanek said:
I never said collusion didn't exist. I'm just saying there are market forces that limit what it can do as long as there's no government support for them.

I'm curious as to what your evidence is to support this. In a completely free market with perfect competition (ie. few barriers to entry, many firms) collusion would be effectively curtailed as you could never get all firms on board with whatever it is that you're trying to do. However, in firms with minimal competition and many barriers to entry (ex. any industry that requires a large 'economy of scale' where small firms cannot survive) it is very possible for collusion to undermine 'market forces.' This can happen without govt intervention and typically requires govt intervention to prevent.
 
Chaos said:
Justice? The concept of "justice" does not exist in economics. And anything that is not a market force is, by definition, an intervention - more formally speaking, an exogenous factor.

What, you're saying that laws against (say) murder are an intervention in the free market???

It's called the free market for a reason, y'know.
 
shanek said:
The free market is by far the best tool for dealing with limited resources that humanity has ever devised!



Well, as you said, as the resource becomes more scarce, the price goes up and up and up and up and up. Eventually, it becomes too expensive for anyone to buy it anymore, or, at least, consumption goes down until its numbers increase enough to make it viable again. It's a problem that takes care of itself.

This is only true to a limited extent. Let me give you the example of Haiti. Haiti was once heavily forrested but has since lost most of its forests due to world demand for lumber. The govt didn't effectively regulate the market and the trees were not cut down in a way that would allow the regeneration of the forests. Now, Haiti has lost this natural resource and has suffered for it. Put aside the fact that they can no longer sell lumber - Haiti now experiences massive mudslides (as in the last hurricane) that kill many many people. Also, there is nothing preventing massive soil erosion.

This is a clear example of a market failure that could have been prevented through proper planning.
 
Ed said:
Dunno. I would suggest that consumer prices for grocery items are fixed, ie. manufacturers and retailers collude to maintain certain price points. Unfortunately, the data to prove it (which would be mind numbingly simple) is very limited in distribution and releasing it publicly would probably result in a nice fat lawsuit. The only way that I can see to do anything at all would be for the government to hop in and supeana the necessary data but I wouldn't hold my breath.

Um...and this isn't a conspiracy theory, why?
 
shanek said:
Well, there's no Economics subforum (yet), but in the interests of education and enlightenment I'd like to present an essay written in the 1950s by Leonard E. Read, founder of the Foundation for Economic Education. It's a wonderful description of how the free market improves life for everyone, using something as deceptively simple as a pencil...told from the pencil's point of view. You can read the whole thing at the link, of course, but I'll post some relevant highlights:

http://www.fee.org/vnews.php?nid=316





He continues with the shipping of the logs, the millwork, etc., all of the complex tasks performed by an uncountable number of people, all of whom participate, in one form or another, in the making of the pencil.







Seems to me that today, much moreso than when Read wrote this piece, we are much in need of the lessons that can be taught to us by a simple pencil...or pen, or a pair of jeans, or any other simple and basic item everyone has and thinks little about when buying it. While the big government types deny even the existance of the Invisible Hand, it is at work every day in practically every aspect of our lives.

I'd just like to point out that this is not an example of the success of the free market - this is an example of the success of the division of labor. They are not the same thing.
 
digitalmcq said:
I'm curious as to what your evidence is to support this. In a completely free market with perfect competition (ie. few barriers to entry, many firms) collusion would be effectively curtailed as you could never get all firms on board with whatever it is that you're trying to do. However, in firms with minimal competition and many barriers to entry (ex. any industry that requires a large 'economy of scale' where small firms cannot survive) it is very possible for collusion to undermine 'market forces.' This can happen without govt intervention and typically requires govt intervention to prevent.

My point exactly. While Mrs. Larson's Broderbred is a really nifty product she likely cannot afford the slotting allowences that it takes (read 'payoff') to get her product on the shelves at major retailers. That being the case, she will always be, alas, a high priced local alternative to the major brands. Unless, of course, she is acquired. Then Mrs. Larson's Broderbred becomes Mrs. Larson's Danish Original Broderbred in no fat, lowered fat, hi fat, and "natural' varieties, all made in China and all carefully scripted as to distribution and price. What happens when the players literally buy the "market forces"?

For reference, here are the brands owned by my good friends at Kraft. The only market forces that they give a rat's ass about are demographic trends. Though, given their parent is PM, I suspect that they a re working on that angle too.

Kraft Foods North America Brands
Beverages Cheese
Coffee
· General Foods
International Coffees
· Gevalia
· Maxim
· Maxwell House
· Sanka
· Starbucks*
· Yuban
Frozen Treats
· Kool-Aid Slushies
Powdered Soft Drinks
· Country Time
· Crystal Light
· Kool-Aid
· Tang
Ready-to-Drink
· Capri Sun*
· Country Time
· Crystal Light
· Kool-Aid Bursts

Convenient Meals
Bacon
· Oscar Mayer
· Louis Rich
Cold Cuts
· Oscar Mayer
· Louis Rich
Dinner Kits
· Taco Bell*
Frozen Pizza
· California Pizza Kitchen*
· DiGiorno
· Jack's
· Tombstone
Hot Dogs
· Oscar Mayer
Lunch Combinations
· Lunchables
Macaroni & Cheese Dinner
· It's Pasta Anytime
· Kraft
· Kraft Easy Mac
· Velveeta
Meat Alternatives
· Boca
Meat Snacks
· Tombstone
Pastas and Sauces
· DiGiorno

Snacks
Cookies
· Barnum's Animals
· Biscos
· Café Crème
· Cameo
· Chips Ahoy!
· Crispin (Puerto Rico only)
· Dad's
· Danish (Puerto Rico only)
· Famous Chocolate Wafers
· Family Favorites
· Old Fashioned
· Ginger Snaps
· Hony Bran (Puerto Rico only)
· Konitos (Puerto Rico only)
· Lorna Doone
· Mallomars
· Marshmallow Twirls
· Nabisco (Puerto Rico only)
· National Arrowroot
· Newtons
· Nilla
· Nutter Butter
· Oreo
· Peak Freans
· Pecan Passion
· Pecanz
· Pinwheels
· SnackWell's
· Social Tea
· Stella D'oro
· Sweetie Pie (Puerto Rico only)
· Teddy Grahams
· Wild Thornberry's*
Crackers
· Air Crisps
· Better Cheddars
· Cheese Nips
· Club Social (Puerto Rico only)
· Crown Pilot
· Doo Dad
· Flavor Crisps
· Harvest Crisps
· Honey Maid
· Nabisco Grahams
· Nabs
· Premium
· Ritz
· Royal Lunch
· SnackWell's
· Stoned Wheat Thins
· Sportz (Puerto Rico only)
· Sultana (Puerto Rico only)
· Triscuit
· Uneeda
· Waverly
· Wheatsworth
· Wheat Thins
· Zwieback
Ice Cream Cones
· Comet Cups
Packaged Food Combinations
· Handi-Snacks
· Lunchables
Refrigerated Ready-to-Eat Desserts
· Jell-O
· Handi-Snacks
Snack Nuts
· Corn Nuts
· PB Crisps
· Planters
Sugar Confectionery
· Altoids
· Callard & Bowser
· CremeSavers Hard Candy
· CremeSavers Soft Candy
· Jet-Puffed
· Kraft Caramels
· Life Savers
· Milka L'il Scoops
· Nabisco Fun Fruits
· Terry's
· Toblerone
· Trolli


Cold Pack Cheese
· Woody's
Cottage Cheese
· Breakstone's
· Knudsen
· Light n' Lively
Cream Cheese
· Philadelphia
· Temp-tee
Grated Cheese
· Kraft
Natural Cheese
· Athenos
· Churny
· Cracker Barrel
· DiGiorno
· Handi-Snacks
· Harvest Moon
· Hoffman's
· Kraft
· Polly-O
Process Cheese Loaves
· Kraft Deluxe
· Old English
· Velveeta
Process Cheese Sauce
· Cheez Whiz
Process Cheese Slices
· Kraft Deli Deluxe
· Kraft Free Singles
· Kraft Singles
· Kraft 2% Milk Singles
· Velveeta
Process Cheese Spread
· Easy Cheese



Grocery
Baking Chocolate/Coconut
· Baker's
Baking Powder
· Calumet
Barbecue Sauce
· Bull's-Eye
· Kraft
Breakfast Beverage
· Postum
Coating Mix
· Shake ‘n Bake
· Oven Fry
Condiments
· Grey Poupon
· Kraft
· Sauceworks
Cooked Cereal
· Cream of Wheat
Cereal Bars
· Nabisco
Dips
· Kraft
Dog Biscuits
· Milk-Bone
Dry Packaged Desserts
· Dream Whip
· D-Zerta
· Jell-O
· Knox Gelatine
· Minute
Energy Bars
· Balance
Fruit Preservatives
· Ever Fresh
Frozen Whipped Topping
· Cool Whip
Ice Cream Topping
· Kraft
Margarine
· Parkay (Puerto Rico only)
Pasta Salads
· Kraft
Pectins
· Certo
· Sure-Jell
Pickles/Sauerkraut
· Claussen
Pie Crusts
· Honey Maid
· Nilla
· Oreo
Ready-to-Eat Cereals
· Post
· Alpha-Bits
· Banana Nut Crunch
· Blueberry Morning
· Cinna-Cluster Raisin Bran
· Cranberry Almond Crunch
· Frosted Shredded Wheat
· Fruit & Fibre
· Golden Crisp
· Grape-Nuts
· Great Grains
· Honey Bunches of Oats
· Honeycomb
· Nabisco (Puerto Rico only)
· Natural Bran Flakes
· Oreo O's
· Pebbles*
· Raisin Bran
· Shredded Wheat
· Shredded Wheat ‘n Bran
· Spoon Size Shredded Wheat
· Toasties
· Waffle Crisp
· 100% Bran

Rice
· Minute
Salad Dressings
· Good Seasons
· Kraft
· Seven Seas
Sour Cream
· Breakstone's
· Knudsen
Spoonable Dressing
· Kraft Mayo
· Miracle Whip
Steak Sauce, Marinade, Worcestershire
· A. 1.
Stuffing Mix
· Stove Top
Toaster Pastries
· Kool Stuf
Yogurt
· Breyers*
· Jell-O
· Light n' Lively
 
roger said:
No, I didn't learn anything from the pencil.

And obviously no one else did, either, because we're seeing the same arguments from incredulity that the pencil refutes...

But it's simply fact that not everyone is doing that.

It's not necessary for everyone to do that.

Let me know when you present a lecture at a GAL convention of sustainable instruments woods, or otherwise get published among a company of peers, and I'll be all ears. Until then, I'm going to pay attention to the experts in the field, not the googlers.

Learned nothing from the pencil at all, then. If there were no pencils, and I was saying the free market could make them, yould be saying, "Let me know when you present a lecture for sustainable pencil production, or otherwise get published among a company of peers, and I'll be all ears. Until then, I'm going to pay attention to the experts in the field, not the googlers." As if me not knowing how to make a pencil somehow refutes my argument in light of the fact that nobody in the world knows how to make one.
 
Ed said:
But, but, what about my point?

A bud of mine who worked for a "major food manufacturer" (since promoted:D) was called upon to testify in the UK when the bloody Brits sensed something amiss. Nothing ever happened, as far as I know. It easy to snow people. Unfortunately.

Yeah, and they're covering up testimony of UFO landings, too.
 
digitalmcq said:
I'm curious as to what your evidence is to support this.

I've presented at least two real-world examples (and that's two more than anyone else in this thread has). Do you have any?
 
digitalmcq said:
This is only true to a limited extent. Let me give you the example of Haiti. Haiti was once heavily forrested but has since lost most of its forests due to world demand for lumber. The govt didn't effectively regulate the market and the trees were not cut down in a way that would allow the regeneration of the forests.

You say government didn't "effectively" regulate it, meaning that they did regulate it in some way. So what did they do? How about some facts here? How do we know this is a market failure and not a failure of ineffective regulations?
 
and realize that Nabisco, General Foods, Breyers, Tombstone, Miller Brewing, Oscar Meyer and Kraft itself were all acquired by PM. Now, suppose you were a supplier to each of those companies. Do you think, for a microsecond, that the aggregate value of your contract would remain the same? Hahahhahahahaha.

No.

And what, precisely is your recourse as they "sharpen the pencil"? Well, it has to do with bending over. Market forces my ass, these companies make the market forces.
 
Re: Re: Economics: I, Pencil

digitalmcq said:
I'd just like to point out that this is not an example of the success of the free market - this is an example of the success of the division of labor. They are not the same thing.

Division of labor isn't a market force?
 
Ed said:
My point exactly. While Mrs. Larson's Broderbred is a really nifty product she likely cannot afford the slotting allowences that it takes (read 'payoff') to get her product on the shelves at major retailers. That being the case, she will always be, alas, a high priced local alternative to the major brands. Unless, of course, she is acquired. Then Mrs. Larson's Broderbred becomes Mrs. Larson's Danish Original Broderbred in no fat, lowered fat, hi fat, and "natural' varieties, all made in China and all carefully scripted as to distribution and price. What happens when the players literally buy the "market forces"?

Do you not have any evidence for these assertions of yours?

For reference, here are the brands owned by my good friends at Kraft. The only market forces that they give a rat's ass about are demographic trends. Though, given their parent is PM, I suspect that they a re working on that angle too.

[list of items deleted]

Ed, all of those items have competing brands sold right next to them on the grocery store shelves. Try again.
 
shanek said:
Do you not have any evidence for these assertions of yours?



[list of items deleted]

Ed, all of those items have competing brands sold right next to them on the grocery store shelves. Try again.


Right, and the prices are effectively fixed.
 
shanek said:
Ed, what is the difference between your arguments and those of a UFO conspiracy theorist?

The data exist to support my contentions.
 

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