Does anyone else here like the Wikipedia?

[St Leo]

Originally posted by Imran Siddiqui
Perhaps so.

Sorry, Imran. I should have admitted my misinterpretation of what you were saying.

You were still wrong, but I did misunderstand you at first.

[OzzyKP]

Originally posted by Urban Ranger
About what you are talking?

That money is supposedly sitting in a bank, not loaned out to many other people by the CEO*. The bank may lend that money to other people, but it has absolutely no bearing on St. Leo's scenario, which is an illustration of consumers not having much say in how "the market" work.

Money never just sits in the bank. If you've got a checking account with $200 bucks in it, the bank doesn't have a drawer with your name on it where that $200 resides. To say that the bank loaned out the money doesn't violate St. Leo's scenario, because St. Leo's scenario was a cynical/misinformed version of reality. In all banks, at all times, that money is doing good by being loaned to others.

As long as the example is going to feature a bank, than I'm gonna explain how the bank works. If you say the money was just sitting under the matress, then yes, the money is doing no good. But CEOs don't stuff millions of dollars under their bed. hehe.

Wrong. Having an excess means the allocation is messed up, because there is going to be a shortage somewhere. Alternatively, an excess means waste. Take your pick.

There isn't a finite amount of wealth/money in the world. It grows, changes, contracts all the time. I am once again amazed by how inept commies are at basic economics.

[OzzyKP]

As for the altuism thing, Agathon is right. People are naturally altuistic. We can get into an argument about how that arose, but its true. People are generous, compassionate, thoughtful, cooperative etc. Not just in ancient history, but today.

As Agathon noted, within tribes, life was often communal and people behaved altuistically toward each other. To a degree at least (we can quibble over the details of prehistoric life).

It must also be noted that on a macro or inter-tribe level, people became incredibly competitive, selfish, aggresive and hostile.

Both cooperation and competition are natural. Both existed in prehistory, both exist now.

So if Agathon's main point is that altuism is natural, I absolutely agree.

[OzzyKP]

One additional point though, to extrapolate. If compassion, altuism, and cooperation are natural human traits that have been with us since prehistory, as both Agathon and I contend, then that would seem to bolster, not diminish the argument for a free market system.

There will always exist a need for society to help out the less fortunate. Except to some hardnosed Ayn Rand fans, and those who praise the free market as a kind of social darwinism, this is an accepted premise.

The point of contention is whether individuals working alone or in private groups (non-profits, churches, etc) can be trusted to help out the less fortunate, or whether government needs to step in to do it. Socialists seem to argue that people are too selfish (ironically) to take care of their fellow man, and need the government to force it on them.

But if we accept the assertion that humans are naturally altuistic, compassionate, etc, then we can be confident that if given the opportunity, private interests would fill the vacuum were government to abandon social services. Churches, charities, non-profits would step up to the plate and provide all the essential services (and yes they are essential) that government now provides.

That's what I figure anyways.

[St Leo]

Originally posted by OzzyKP
But if we accept the assertion that humans are naturally altuistic, compassionate, etc, then we can be confident that if given the opportunity, private interests would fill the vacuum were government to abandon social services. Churches, charities, non-profits would step up to the plate and provide all the essential services (and yes they are essential) that government now provides.

That they would. Unfortunately, the little fish don't have the resources to maintain the same level of universal accessibility a government can. They are also much more likely to be biased in favour of some minority.

Government is a tool. The whole reason Americans and French had their revolutions was so that the government would be a tool for good, not evil.

Because it represents all of us -- it gets its mandate from the vote each of us casts -- it can serve all of us. Much like Google's philosophy is "Don't Be Evil", Canada's philosophy is that of "Good Government". Our government sometimes fails us -- observer the Arar tragedy -- but mostly it manages to do good.

As the preamble to the German Constitution says, "The dignity of humanity is inviolate. To respect and protect this dignity is the duty of all government power."

[SnowFire]

OK. You start a shop and make hats. How much do you charge for your hats? If you want to sell them, you will have to charge the same or lower than your competition, or you will end up with unsold hats. If you just charge as much as you need and everyone else does, then what incentive is there for people to invest in hat factories when they can get a higher return elsewhere? If everyone starts selling below the price the market will bear, people will fund other things than hat factories and there will be a hat shortage.

This... is... bizarre. How are you stating the facts, and then not getting them?

If I had time, I'd go draw a simple supply & demand curve in MS Paint or something. But you have the gist of it. We all know that the market clearing price is where the supply curves and the demand curves intersect- the same amount of product is supplied as is sold. So what if the price is set too low, for whatever reason? Not enough suppliers are interested- it's too low on the supply curve- and there's an excess of buyers. So, there's a shortage, and buyers start bidding each other up to compete over the few products being sold. Thus, the price starts rising.

If the reverse is true, the price is too high, too many people are supplying, the warehouses start filling up, and not enough people are buying. Thus producers start scaling back production or going out of business, there's less supply on the market, and the price goes down.

In both cases, the market "wants" to take the wrong price and send it toward the equilibrium price. Once it's there, or close, it will automatically adjust as the equilibrium price changes due to new developments in the market (maybe a drop in demand, a disruption in supply, whatever).

So what is this hat shortage coming from?! There's only a shortage when the government artificially intervenes and sets the price too low, such as in the case of generators. If left to the market, the price will increase (attracting suppliers & dissuading buyers) until there's no shortage.

Now, yes, maybe there's a shortage based on how many hats we'd LIKE to be on the market, but that's not economics problems. As you'll recall from the first day of any decent econ class, economics can be thought of as the study of scarcity. If there's enough of something- like air- there's no market for it. Everybody has enough. If you think everybody should own a hat, that's admirable, I guess, but then there are tools like subsudies and so on that work within the market.

Really, get out and draw the supply & demand curves. The answer is in the graph.

[OzzyKP]

Originally posted by St Leo

Originally posted by OzzyKP
But if we accept the assertion that humans are naturally altuistic, compassionate, etc, then we can be confident that if given the opportunity, private interests would fill the vacuum were government to abandon social services. Churches, charities, non-profits would step up to the plate and provide all the essential services (and yes they are essential) that government now provides.

That they would. Unfortunately, the little fish don't have the resources to maintain the same level of universal accessibility a government can. They are also much more likely to be biased in favour of some minority.

I believe the resources would be there. I am in the non-profit field, and I know how much charitable giving fluxiates with the economy. If people have more extra money, they give away more. If government services were cut, and taxes were cut in the same proportion, then private services would have more funds. Perhaps not perfect, but sufficient.

The bias is a valid criticism. A teacher once used the example of if rich parents were giving money to support a school, they'd all give money to their already well financed school, rather than the inner city one that needs it more. Admittedly, it wouldn't be a perfect set up. But honestly, things aren't incredibly equitable with the government here (i dunno about other countries) anyways. Schools in rich districts get more money than others.

[Urban Ranger]

Originally posted by SnowFire
[So what is this hat shortage coming from?! There's only a shortage when the government artificially intervenes and sets the price too low, such as in the case of generators. If left to the market, the price will increase (attracting suppliers & dissuading buyers) until there's no shortage.

Only if it's an openly competitive market, SnowFire.

You can have a shortage in other markets.

[Urban Ranger]

Originally posted by OzzyKP
Money never just sits in the bank.

I know that, but this has nothing to do with the actions of the CEO in question, and has no bearing on St Leo's argument at all.

Originally posted by OzzyKP
There isn't a finite amount of wealth/money in the world. It grows, changes, contracts all the time.

If it's not finite, it must be infinite.

Originally posted by OzzyKP
I am once again amazed by how inept commies are at basic economics.

/me chuckles softly to himself

[notyoueither]

Originally posted by Urban Ranger


Really, NYE. This passage shows a basic lack of understanding of business and economics on your part.

[Agathon]

This... is... bizarre. How are you stating the facts, and then not getting them?

Of course it's bizarre. NYE is imagining a price fixing situation where he and the other hat makers agree to set the price without competition.

So what is this hat shortage coming from?! There's only a shortage when the government artificially intervenes and sets the price too low, such as in the case of generators. If left to the market, the price will increase (attracting suppliers & dissuading buyers) until there's no shortage.

This is the case that NYE is describing. He thinks a market can operate properly when people set "unselfish" prices.

[OzzyKP]

Originally posted by Urban Ranger
I know that, but this has nothing to do with the actions of the CEO in question, and has no bearing on St Leo's argument at all.

I believe I already addressed that. So tell me you read my statement and have a response. Instead of a "you're wrong because I said so" which doesn't help things.

Originally posted by Urban Ranger
If it's not finite, it must be infinite.

Good vocab there. Yes, obviously.

[St Leo]

Constant, invariant, static, fixed, banana. Pick four.

[notyoueither]

Originally posted by Agathon
Of course it's bizarre. NYE is imagining a price fixing situation where he and the other hat makers agree to set the price without competition.

I said nothing about price fixing. I said that someone could sell products for less than the maximum and not create a crisis in the market.

What's bizarre is someone from an ivory tower pronouncing that what happens every day in the real world doesn't actually happen.

This is the case that NYE is describing. He thinks a market can operate properly when people set "unselfish" prices.

Depending on what you describe as 'unselfish', yes it can. What makes you think that a market can only work if everyone is greedy?

[Agathon]

I said nothing about price fixing. I said that someone could sell products for less than the maximum and not create a crisis in the market.

One person doing it wouldn't create a problem, but everyone doing it would be.

Depending on what you describe as 'unselfish', yes it can. What makes you think that a market can only work if everyone is greedy?

If people don't aim for the best price they can get, what's the point of competition?