Not that this is a hugely surprising conclusion. If the domestic economy is thrown open to international trade then there’s an increase in competition for the domestic producers. This is rather the point of having that opening. But the implication of this is obvious. For those who worry about increasing market power, increased economic concentration, the answer is obvious too – have more free trade. Actually, this becomes a litmus test. For those who do so complain but don’t argue for lowering trade barriers we know they’re not being serious.…See More
Quite clearly if you just say that growing, buying, possessing and selling cannabis is now legal then you’ve entirely destroyed the back market in cannabis. Sure, some people might then carry on without paying taxes but that is, by definition, grey market, not black. And sure enough, people will want to tax that now legal cannabis because politicians have a near unlimited desire for more of our money to spend.
But it takes real skill and talent to both make cannabis sales, growing, purchase and consumption legal and yet also at the same time expand the black market.…See More
There seems to be a little misunderstanding of how markets work here – which is a pity as Ofgem is supposed to be the organisation that regulates Britain’s electricity market. The admission is that this market appears now to be finally working – this being thought of as a mistake which must be rectified. The problem identified being that at the bottom end of this market there is a plethora of shoddy fly by nights who are going bust in droves.…See More
Of course it saddens when a company goes bust – dreams, livelihoods and capital all up in smoke, as here at Economy Energy as it closes down for being, well, actually, for being a bit terrible really. This also actually being the point of having a market economy, so that those who are a bit terrible do indeed get chucked out and go bust. That’s the entire mechanism by which we find out who isn’t completely terrible and thus climb the difficult ladder to the current state of glorious wealth for us all.…See More
Imagine being so poor, so deprived of consumer choice and supply, that you’d go to the poorest country in an entire half of the world in order to be able to go shopping. That’s the triumph of Cuban socialism for you right there, the achievement of the Castro rule. Sure, they’ve got free health care and they go shopping to Haiti – yes, Haiti, that place devastated by the earthquake, environmental destruction, the Duvalier dictatorship and the Clinton aid – to buy light bulbs.…See More
Yes, obviously, we all fall back in amazement as we contemplate the idea that Gordon Brown understood any part of economics. And yet he did and it was a major reason why we’re not in the euro today. How interest rates affect an economy will depends upon the structure of that economy. One major pathway being through mortgages and household budgets. A country with largely floating rate mortgages will be more leveraged to interest rate changes than one with fixed rate.…See More
Once we accept the basic ideas of he division and specialisation of labour, then the subsequent trade in production, it becomes obvious that the larger the area we trade oer, the more people we trade with, then the more benefit we gain from the trade. Because we’re dividing and specialising the labour with more people, obviously enough. Thus all that pablum about buy local is shown to be false.
An interesting example of which is kidney exchange chains.…See More
A nice little story from China. Meteorites fell on some villages near the Burma border, the locals there deciding that they’re very valuable, very valuable indeed. The thing is, there’s already a pretty liquid market in meteorite pieces. I’ve seen, for example, a street stall in my native Bath selling them as curios. Given that we’ve got this market, an extant one, with prices and all that goes with one, we’re going to see some very disappointed villagers:
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Chinese treasure hunters are raking in a fortune selling meteorites after a ball of fire lit up the sky on the China-Burma border.
As we all know a pure free market does not exist and never has existed. The question then becomes, well, is that pure free market a useful model for understanding what happens in those necessarily impure ones? Opinions differ here. The Senior Lecturer at Islington Technical College thinks that market imperfections are such that all must be in the state, all of the state and nothing against the state. Steve Keen insists that the failure of the purest of pure models means that all must be treated as oligopolisitc competition – amazingly, something which demands that his friends in the state get to decide things.…See More
The Guardian treats us to another of these feminist rants where the writer manages to show absolutely no understanding of the subjects under discussion at all. For we’re led to the conclusion that the problem with sex is capitalism. Well, OK, we’ve all rather suspected that a certain portion of the feminist movement has rather got the wrong end of the sex stick but could they at least get the economic descriptions here right?
What is being discussed is a market, not capitalism.…See More