Hey, politicians! Want to create jobs!

[Hydesland]

The broken window fallacy is a fallacy.

http://marginalrevolution.com/marginalr ... _wind.html

Read the comments buddy.

I'm not reading all of them, but in general blog commenters are at the very bottom of the credibility tree, just above youtube commenters and /b/tards. Tyler is credible on the other hand.

[Moral Libertarians]

So, you just proved that free-markets lead to monopoly.

Thanks. At least you admit it.

Nope. Free markets lead to monopolies only when there are entry barriers that prevent small businesses from setting up to compete. A monopoly is not inherently a bad thing; it can be the only way to provide some services. It goes bad if the company starts abusing its power and making excess profits - in which case, if the market is working correctly, other firms will enter the market to compete.

[Moral Libertarians]

The only way to maintain high real wages (and the correspondingly high standard of living) is via productivity. Pretty much the only answer to the dilemma that doesn't rely on falling living standards is to keep American productivity high when compared to that of foreign workers.

One big problem with trying to stop outsourcing is that if you succeed, all prices go up. And because of how economics works, even if you assume an increase in real wages, the overall standard of living would go down.

Exactly. Which is why education funding is critical...

[Wienholdland]

So, you just proved that free-markets lead to monopoly.

Thanks. At least you admit it.

Nope. Free markets lead to monopolies only when there are entry barriers that prevent small businesses from setting up to compete. A monopoly is not inherently a bad thing; it can be the only way to provide some services. It goes bad if the company starts abusing its power and making excess profits - in which case, if the market is working correctly, other firms will enter the market to compete.

zomglogichurtsmybrain

[The Black Forrest]

Ok. You are now making a $1 an hour; where you going to live and how are you going to eat?

Meh. There'd probably be deflation if that occurred, in which case, prices would also be lower.

Not quickly enough. Each product has set cost and they aren't going to drop it down enough to suit a $1 an hour economy.

Hmmm if they are selling less; they chuck workers........

[Moral Libertarians]

Nope. Free markets lead to monopolies only when there are entry barriers that prevent small businesses from setting up to compete. A monopoly is not inherently a bad thing; it can be the only way to provide some services. It goes bad if the company starts abusing its power and making excess profits - in which case, if the market is working correctly, other firms will enter the market to compete.

zomglogichurtsmybrain

Sorry... but economics is my 'thing'

[The Black Forrest]

So, you just proved that free-markets lead to monopoly.

Thanks. At least you admit it.

Nope. Free markets lead to monopolies only when there are entry barriers that prevent small businesses from setting up to compete. A monopoly is not inherently a bad thing; it can be the only way to provide some services. It goes bad if the company starts abusing its power and making excess profits - in which case, if the market is working correctly, other firms will enter the market to compete.

You make the gigantic assumption current players want the market working correctly.

A completely free market is fantasy......

[Keronians]

So, you just proved that free-markets lead to monopoly.

Thanks. At least you admit it.

Nope. Free markets lead to monopolies only when there are entry barriers that prevent small businesses from setting up to compete. A monopoly is not inherently a bad thing; it can be the only way to provide some services. It goes bad if the company starts abusing its power and making excess profits - in which case, if the market is working correctly, other firms will enter the market to compete.

Not exactly. Some markets could function another way.

If I identify a completely new market or revolutionise production of a product (like Ford did with cars in 1913), then I'd gain sales. I'd expand, and then, when other business owners try to get into the market, I could use aggressive policies to buy them out or crush them. Take advantage of economies of scale and set destroyer pricings.

On the other hand, in most markets, this is not the case, and as such, most markets wouldn't have monopolies.

Though, I thought that a monopoly wasn't only defined as having a ridiculously huge market share, but also the firm then taking advantage of its position to set very high prices.

[Trotskylvania]

Minimum wage doesn't have much of an effect on employment in first world countries, so no.

[Wienholdland]

Nope. Free markets lead to monopolies only when there are entry barriers that prevent small businesses from setting up to compete. A monopoly is not inherently a bad thing; it can be the only way to provide some services. It goes bad if the company starts abusing its power and making excess profits - in which case, if the market is working correctly, other firms will enter the market to compete.

You make the gigantic assumption current players want the market working correctly.

So your view is to concede defeat to those criminals by continuing the road to tyranny?

[The Black Forrest]

The only way to maintain high real wages (and the correspondingly high standard of living) is via productivity. Pretty much the only answer to the dilemma that doesn't rely on falling living standards is to keep American productivity high when compared to that of foreign workers.

One big problem with trying to stop outsourcing is that if you succeed, all prices go up. And because of how economics works, even if you assume an increase in real wages, the overall standard of living would go down.

Prices have not fallen that much. Stores are simply stocking less and people are shrinking what they sell. For example Coke now sells a 20 pack and 8 pack for the same price as before......

[Mediterreania]

We need more people qualified and starting up their own small businesses, I don't care if they're builders or run a paki shop. David Cameron is doing it with University technical colleges and the 'Big Society', plus the public sector cuts and the Universal Credit which will eliminate a benefits culture. I do agree we need less regulation and more privatization but we shouldn't lower minimum wage.

Btw I speak for Britain not America.

In America they're making it significantly harder for small businesses to enter the market.

Death to the State and Capital.

[The Black Forrest]

You make the gigantic assumption current players want the market working correctly.

So your view is to concede defeat to those criminals by continuing the road to tyranny?

Simple competition is not going to convert the market to a "completely free market"

It's sounds nice in text, people are the problem......

[Rainbows and Rivers]

Incidentally, do the people advocating tariffs as a way to lower foreign competition realize that a tariff is essentially equivalent to imposing a tax on everyone buying the good and then giving some of the tax money to the manufacturers of that good? If you do and you still support it, it's fine. It's just that in the past I've run into people with profound misunderstanding of how tariffs work.

[Shnercropolis]

I partially agree with you, but we should also replace welfare with jobfare... instead of the unemployed relying on some government beauracrat for their livelyhood, they can get a job and WORK FOR A LIVING!

ditto.

[UCUMAY]

I gave up on America long ago. Really who hasn't? The only thing I can see that is good are the personal freedoms you have.

It's why I have a back up plan to go to Europe, or Canada if necessary.

[Greater Cabinda]

I partially agree with you, but we should also replace welfare with jobfare... instead of the unemployed relying on some government beauracrat for their livelyhood, they can get a job and WORK FOR A LIVING!

ditto.

I know, right? Because everyone is hiring right now...

[The Black Forrest]

In America they're making it significantly harder for small businesses to enter the market.

Death to the State and Capital.

You forgot business leaders. They are part of it as well.....

[The Black Forrest]

ditto.

I know, right? Because everyone is hiring right now...

Heck if minimum wage was only a dollar an hour; we would be in paradise.

Of course there would be no attempt to drop other salaries as well........

[Wienholdland]

So your view is to concede defeat to those criminals by continuing the road to tyranny?

Simple competition is not going to convert the market to a "completely free market"

It's sounds nice in text, people are the problem......

Nobody said that competition is the creator of the free market, it is simply one of the most important aspects of how and why the free market would work, if allowed to.

Getting the violence initiators(government) out of the market on the other hand, would free up the market.

[Moral Libertarians]

You make the gigantic assumption current players want the market working correctly.

A completely free market is fantasy......

True... but it's a useful tool for analysing how to make our real-life markets work better.

If I identify a completely new market or revolutionise production of a product (like Ford did with cars in 1913), then I'd gain sales. I'd expand, and then, when other business owners try to get into the market, I could use aggressive policies to buy them out or crush them. Take advantage of economies of scale and set destroyer pricings.

On the other hand, in most markets, this is not the case, and as such, most markets wouldn't have monopolies.

True... but that's where government regulation comes in. Nothing excessive, just to prevent greed for more power causing monopolies to grow too large.

Though, I thought that a monopoly wasn't only defined as having a ridiculously huge market share, but also the firm then taking advantage of its position to set very high prices.

I think the official definition (in the UK anyway) is a that a monopoly has 25%+ share, and a firm has a 'dominant position' at 40%+ - that's how regulators define it in their investigations, anyway.

[Moral Libertarians]

Simple competition is not going to convert the market to a "completely free market"

It's sounds nice in text, people are the problem......

I know (sigh), but its people's greed that also underpins the whole idea of capitalism. Gotta love the system!

[Keronians]

Simple competition is not going to convert the market to a "completely free market"

It's sounds nice in text, people are the problem......

I know (sigh), but its people's greed that also underpins the whole idea of capitalism. Gotta love the system!

It's also what condemns Communism to doom.

[Trotskylvania]

I know (sigh), but its people's greed that also underpins the whole idea of capitalism. Gotta love the system!

It's also what condemns Communism to doom.

Maybe straw-communism, but actual communism not so much.

[Keronians]

It's also what condemns Communism to doom.

Maybe straw-communism, but actual communism not so much.

How so?

Greed ultimately means that people will not be satisfied with a classless society.