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152 comments on DrumBeat: July 1, 2006

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step back on July 2, 2006 - 10:56am Permalink | Subthread | Parent | Comments top

It is all good ... the Invisible Hand has a higher purpose which we mortals are incapable of comprehending ... If the Invisible Hand deems it right for some "less fortunate" among us to depart their Free Market existence here on Earth and move on to their exponentially accumulated pension plans in the Spreadsheet Sky ... then so be it.

Who are we to question?

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Magnus Redin on July 2, 2006 - 12:58pm Permalink | Subthread | Parent | Comments top
The invisible hand is indeed doing good work with these problems and I am quite serious about that. If all individuals and groups within a country are allowed to own and trade and there is law and order famine all but disapperas in short order and people start to prosper. But if one powerfull group hates another with less power or decide that they should stop such progress to keep a small profit for themselves instead of allowing a larger one that would bring more or less random changes you get a mess.
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step back on July 2, 2006 - 2:51pm Permalink | Subthread | Parent | Comments top
Obviously, my post was sarcasm.

Yes, there are some instances where the Invisible Hand does more good than harm.

There are other instances (ones which economist unapologetically sweep under the rug as "market failures") where the Invisible Hand fails abysmally.

Peak Oil is a huge example of market failure because we, as the minions of the Hand, keep investing more of our scarce resources and limited time into a way of life that is destroying the planet via GW.

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Magnus Redin on July 2, 2006 - 3:06pm Permalink | Subthread | Parent | Comments top
I have started to wonder if a large part of the problem is a lack of real competition and consumers who think for themselves. There might be need for more of the famous invisble hand in both ends of the spectrum, in both the earths most prosperous country counted in GDP and the weakest ones.

I wish for more of it at home where we are stuck with inefficient government organisations in many service businesses.

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Don Sailorman on July 2, 2006 - 9:12pm Permalink | Subthread | Parent | Comments top
Neither peak oil nor global warming result from a lack of competition.

The problems result from

  1. the tragedy of the commons
  2. high information and transaction costs, e.g. it is not feasible for me and a thousand others to pay you one cent so that you do not drive a car. In other words, negative externalities are involved, and the market does poorly to correct negative externalities when many people are involved.
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Magnus Redin on July 3, 2006 - 12:57am Permalink | Subthread | Parent | Comments top
True, I were only thinking about powerty and famine.
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odograph on July 3, 2006 - 8:09am Permalink | Subthread | Parent | Comments top
Aren't we supposed to say "poor price discovery" when people go down to buy another SUV (expecting happy motoring)?
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