- 22 Oct 2012 23:15
#14087831
Sure, at the low, low cost of your freedom and future.
Democratic Peace Theory is pretty much a lie; it's end-of-history nonsense. It doesn't even stand up to recent history, where there are several examples of representative democratic states waging war against each other. At best, Democratic Peace Theory is a euphemism for countries being disarmed by inclusion in the American global system.
Sure--if we adopt socialism. It's not unrealistic for most of our social ills to be solved; we have an immense amount of capital and industrial capacity. Suggesting that we could provide enough for everyone isn't that unrealistic. We just aren't actually going to do that under the current economic model.
Right, and corporations are an inherently inefficient way to do that. For-profit business in general is an inefficient model for distribution of resources.
Prices aren't actually set that way. That's the problem. The evidence is overwhelmingly in favor of cost-plus pricing from a microeconomic standpoint. Businesses don't price according to consumer preference, they price according to their costs and intended profit margin. They are only bounded by consumer demand thresholds. Meaning that the price limits are set by a customer's willingness to pay, but the minimum price is established by the company just tacking enough profit onto their costs to make it worth their while. The only industries where pricing actually occurs according to markets as described in macroeconomics textbooks are commodities. That's really the only sort of product that is priced according to markets, and those markets are often heavily distorted by public preference and informational asymmetries.
The problem with your argument lies in this basic fact--prices aren't actually set in the way you keep insisting they are.
You ignore psychology to the detriment of your argument. Goods are more price-inelastic because they are considered more essential, meaning that people will bear the higher costs with a larger degree of irrationally. In other words, you are assuming that economic actors are rational, but that would only be the case for a hypothetical perfectly elastic good.
Consumers will have better knowledge because they will also be the producers. And yes, democratization of industry does remove monopolies.
In a socialist state, one cannot hold a monopoly because one cannot establish exclusive ownership over the resources one would need to monopolize. Ending property cannot help but also stop monopolization.
Sceptic wrote:In a way I do have utopian beliefs. Looking at contemporary modern liberal democracies, I can see that it is possible to have universal health care and education.
Sure, at the low, low cost of your freedom and future.
I can also see that democracies rarely, if ever, invade one another's territories
Democratic Peace Theory is pretty much a lie; it's end-of-history nonsense. It doesn't even stand up to recent history, where there are several examples of representative democratic states waging war against each other. At best, Democratic Peace Theory is a euphemism for countries being disarmed by inclusion in the American global system.
and that it doesn't seem totally unrealistic that we may also one day be in a position to provide universal housing.
Sure--if we adopt socialism. It's not unrealistic for most of our social ills to be solved; we have an immense amount of capital and industrial capacity. Suggesting that we could provide enough for everyone isn't that unrealistic. We just aren't actually going to do that under the current economic model.
The economic goal could be greed, corruption and resource hoarding, like you mention (there could also be any other wide ranging motives at play) but mostly the calculation issue I am talking about is a logistic issue more than anything else; corporations need to know what to buy, sell, transport and produce where, when and how.
Right, and corporations are an inherently inefficient way to do that. For-profit business in general is an inefficient model for distribution of resources.
Prices give them an indication of consumer preferences in the past and present.
Prices aren't actually set that way. That's the problem. The evidence is overwhelmingly in favor of cost-plus pricing from a microeconomic standpoint. Businesses don't price according to consumer preference, they price according to their costs and intended profit margin. They are only bounded by consumer demand thresholds. Meaning that the price limits are set by a customer's willingness to pay, but the minimum price is established by the company just tacking enough profit onto their costs to make it worth their while. The only industries where pricing actually occurs according to markets as described in macroeconomics textbooks are commodities. That's really the only sort of product that is priced according to markets, and those markets are often heavily distorted by public preference and informational asymmetries.
The problem with your argument lies in this basic fact--prices aren't actually set in the way you keep insisting they are.
This can help them determine potential market trends in the future. You mention price inelasticity. Yes some goods are price 'inelastic', relatively speaking that is, but however dear a price they paid, consumers still benefitted from the transaction, full stop.
You ignore psychology to the detriment of your argument. Goods are more price-inelastic because they are considered more essential, meaning that people will bear the higher costs with a larger degree of irrationally. In other words, you are assuming that economic actors are rational, but that would only be the case for a hypothetical perfectly elastic good.
Finally, socialism doesn't solve information asymmetry in the sense that, consumer groups will never have clear 100% knowledge of production processes and arguably removing hierarchies does not remove monopolisation,
Consumers will have better knowledge because they will also be the producers. And yes, democratization of industry does remove monopolies.
in the sense that privatisation of the means of production becomes outlawed and subsequent producer groups in the Socialist Community are the only buyers and sellers, so they are still in a strong economic forthold (they are able to buy cheaply from suppliers and sell at low quality and high prices to the consumer because of the absence of competition).
In a socialist state, one cannot hold a monopoly because one cannot establish exclusive ownership over the resources one would need to monopolize. Ending property cannot help but also stop monopolization.
- By wat0n
- By Potemkin