Re: OT: Economics and other non-Debian ramblings
- From: Curt Howland <Howland@xxxxxxxxx>
- Date: Wed, 7 Mar 2007 09:28:20 -0500
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Joe <joe@xxxxxxxxxxxxxx> states:
- ------
The free market does have an enormous disadvantage, which is that it
is
not self-sustaining. The great benefit of a free market in consumables
is that it invokes one of the very few negative feedback systems in
human psychology, the so-called 'law of supply and demand'. Negative
feedback systems are easy to stabilise.
- ------
But...that's not true.
Negative feed-back systems are the ones that are stable. A
high-amplitude change is _negatively_ fed back to the input, reducing
the inputs and moderating the amplitude of the output.
Supply and demand is the relationship between how much of a product is
available (supply) and how much people are willing to pay for it
(demand). As something is used up, its price rises. We will never run
out of petroleum, for instance, but there will be a time when its
price is high enough that the alternatives will be economically
efficient to use. Just like whale oil.
The demand for Faberge' Eggs is such that their price per unit is very
high. That is because their supply is so limited. But by having the
price rise so very much, demand is moderated.
A store has a sale on a product in order to move more of it. That is
because demand increases as the price decreases for the same product.
Otherwise, stores would not have sales.
The free-market is exceedingly stable. As the example of the Great
Inflation of 1923 shows, it requires a _government_ to destabilize an
economy, because government is the only agent which can utilize force
to make people do what is economically inefficient. For example, to
accept fiat currency that that same government is printing more and
more of.
Curt-
- --
September 11th, 2001
The proudest day for gun control and central
planning advocates in American history
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