Big Kahunas

Gig Giacona wrote:

And with the advances in science I wouldn't bet the farm that there will
never be another marketable Cuban mahogany tree IF there is sufficient
demand.



Yes, this is an argument that is often made, the market will save us all
with advances in technology and science and efficiency. The market serves
itself, what is good for the market is not necessarily good for the public.
Their interests may intersect but don't bet the farm on it.

- Carl -



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"Carl Ellis" wrote in message
...
Gig Giacona wrote:

And with the advances in science I wouldn't bet the farm that there
will
never be another marketable Cuban mahogany tree IF there is sufficient
demand.



Yes, this is an argument that is often made, the market will save us all
with advances in technology and science and efficiency. The market
serves
itself, what is good for the market is not necessarily good for the
public.
Their interests may intersect but don't bet the farm on it.

- Carl -




How about an example..

Gig Giacona wrote:

How about an example..

That's easy; straight out of any intro economics class.

For example, consider a factory. It has a choice of producing in an
environmentally friendly way at price X, or in an environmentally
unfriendly way at some fraction of X.

Even if we assume everyone operating with complete knowledge and
"enlightened self interest", if the market for the factory is sufficiently
larger than the population impacted by the pollution generated by the
factory, it is more "market friendly" (ie. more profitable) to operate in
an environmentally unfriendly way.

These are called "market failures". The term "failure" is based upon a
judgement against some ideal, which tells you that even economists have
aspirations that aren't market-driven grin.

It's been a while, but I think the definition of "market failure" is where
the market doesn't allocate resources to maximize consumer satisfaction.
In the above example, even if we assume people would be willing to pay a
higher cost for their products to maintain a clean environment for
themselves, this doesn't happen because most dollars spent would provide a
clean environment for someone other than the buyer.

That is, the consumers of a given factory's output aren't those that suffer
from the pollution from that factory.

It seems to me that whenever there is a cost paid by someone other than the
consumer, this type of situation can arise. I *think* this is what is
meant by an "externality", but I'm not sure (like I said: it's been a
while).

- Andrew

But how about an example from real life.

"Andrew Gideon" wrote in message
online.com...
Gig Giacona wrote:

How about an example..

That's easy; straight out of any intro economics class.

For example, consider a factory. It has a choice of producing in an
environmentally friendly way at price X, or in an environmentally
unfriendly way at some fraction of X.

Even if we assume everyone operating with complete knowledge and
"enlightened self interest", if the market for the factory is sufficiently
larger than the population impacted by the pollution generated by the
factory, it is more "market friendly" (ie. more profitable) to operate in
an environmentally unfriendly way.

These are called "market failures". The term "failure" is based upon a
judgement against some ideal, which tells you that even economists have
aspirations that aren't market-driven grin.

It's been a while, but I think the definition of "market failure" is where
the market doesn't allocate resources to maximize consumer satisfaction.
In the above example, even if we assume people would be willing to pay a
higher cost for their products to maintain a clean environment for
themselves, this doesn't happen because most dollars spent would provide a
clean environment for someone other than the buyer.

That is, the consumers of a given factory's output aren't those that
suffer
from the pollution from that factory.

It seems to me that whenever there is a cost paid by someone other than
the
consumer, this type of situation can arise. I *think* this is what is
meant by an "externality", but I'm not sure (like I said: it's been a
while).

- Andrew

"Gig Giacona" wrote in message
...

"Carl Ellis" wrote in message
...
Gig Giacona wrote:

And with the advances in science I wouldn't bet the farm that there
will
never be another marketable Cuban mahogany tree IF there is
sufficient
demand.



Yes, this is an argument that is often made, the market will save us all
with advances in technology and science and efficiency. The market
serves
itself, what is good for the market is not necessarily good for the
public.
Their interests may intersect but don't bet the farm on it.

- Carl -




How about an example..




ENRON




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Here's a thought.

A pure free market and communism have something in common. They can never
work. Why? Human greed, hunger for power, and fallibility.

It seems that there is some tension necessary for success. In the case of
our government it's the executive, judicial, and legislative branches, plus
the multi-party system. In the business world it's entrepreneurs,
corporations, government, and consumers.


- Carl -


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"Carl Ellis" wrote in message
...

"Gig Giacona" wrote in message
...

"Carl Ellis" wrote in message
...
Gig Giacona wrote:

And with the advances in science I wouldn't bet the farm that
there
will
never be another marketable Cuban mahogany tree IF there is
sufficient
demand.



Yes, this is an argument that is often made, the market will save us
all
with advances in technology and science and efficiency. The market
serves
itself, what is good for the market is not necessarily good for the
public.
Their interests may intersect but don't bet the farm on it.

- Carl -




How about an example..




ENRON


ENRON could have not have happened in a truly free market. It is an example
of what happens as a market is freed after a long period of artificial
control. Another example is the Russian Mafia.

"Gig Giacona" wrote in message ...
"Carl Ellis" wrote in message
...

"Gig Giacona" wrote in message
...

"Carl Ellis" wrote in message
...
Gig Giacona wrote:

And with the advances in science I wouldn't bet the farm that
there
will
never be another marketable Cuban mahogany tree IF there is
sufficient
demand.



Yes, this is an argument that is often made, the market will save us
all
with advances in technology and science and efficiency. The market
serves
itself, what is good for the market is not necessarily good for the
public.
Their interests may intersect but don't bet the farm on it.

- Carl -




How about an example..




ENRON


ENRON could have not have happened in a truly free market. It is an example
of what happens as a market is freed after a long period of artificial
control. Another example is the Russian Mafia.

Deregulation simply gave ENRON the opportunity to game the system. It
all boils down to whether people want to play fair or not. Yes, in
the end the market punished them by dropping their stock price to zero
but only after the government opened investigations. People will
cheat if they believe they can get away with it. The "free market"
does not prevent this.

I believe a truly free market is unattainable - it's a utopian ideal.
Human nature will not allow it.


- Carl -

"Carl Ellis" wrote in message
om...
"Gig Giacona" wrote in message ENRON


ENRON could have not have happened in a truly free market. It is an
example
of what happens as a market is freed after a long period of artificial
control. Another example is the Russian Mafia.

Deregulation simply gave ENRON the opportunity to game the system. It
all boils down to whether people want to play fair or not. Yes, in
the end the market punished them by dropping their stock price to zero
but only after the government opened investigations. People will
cheat if they believe they can get away with it. The "free market"
does not prevent this.

I believe a truly free market is unattainable - it's a utopian ideal.
Human nature will not allow it.



You are giving too much credit to the government. ENRON's house of cards
would have failed and was in the process of doing so before the
investigation.

I'm not saying there should be know laws. Fraud, theft should be controlled
and punished by the government.

Let's just call it quits and talk about airplanes.

What kind do you have, Carl?

Let's just call it quits and talk about airplanes.

What kind do you have, Carl?



Good idea 8-).

1977 F-19 Taylorcraft. It has an O-200 and 1500 lbs gross. It's a real
performer.

- Carl -


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