Lesson #120 - We don’t need no stinking competition - Part 3
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MONOPOLIES AND OLIGOPOLIES
Now we are venturing into an interesting subject. The “popular” interpretation of Monopolies and Oligopolies, is that they are “evil”. Actually, that they are so evil that “something must be done”. And again, nothing can be further from the truth. Politicians and their economic drones do nothing to dispel this gross error; they actually foster it whenever possible because it is to their advantage to do…
Lesson #119 - We don’t need no stinking competition - Part 2
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DIRECT COMPETITION
This is what your regular Perry and Maria “out-there” understand for competition. A product for a product. A classic example is cars of the same type (e.g. mini-van for mini-van). Lowest price usually wins. There is a gigantic “body of knowledge” (as scientists like to put it) written about it. What it is and what it is not. What it does, how it works, what is OK and…
Lesson #118 - We don’t need no stinking competition - Part 1
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When people who do not understand free markets talks about them, they usually make the error of equating free markets with competition. Furthermore, the competition they mean is usually direct competition, this is, two similar products competing for the same customer. What we say to them is that we don’t need no stinking competition, for free markets to operate… and we are going to tell you all about it.
This…
Lesson #117 - Introducing Mr Free Market - Part 4
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CHARACTERISTICS OF FREE MARKETS - CONT'D
Competition
Competition is important but it is not critical for the free markets. Free markets were created before competition, operated without competition, in some instances they operate without competition and can continue to operate without it. This is a fact. The reasons are complex and lengthy deserving of their own lesson, and so, we will talk about competition in the next one.
Government intervention
Market…
Lesson #016 - Introducing Mr Free Market - Part 3
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CHARACTERISTICS OF FREE MARKETS - CONT'D
Self-Organization
Free markets not only run on order, they create it. This is an oddity as much as it is a fact. However, it is not an unexpected fact. Let’s see why.
What’s in it for sellers
Sellers want an orderly state of affairs primarily for four reasons, which are pretty much commonsensical:
- Goods and services need protecting against thieves. In a state of chaos,…
Lesson #115 - Introducing Mr Free Market - Part 2
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CHARACTERISTICS OF FREE MARKETS
These are the typical characteristics one would expect of truly free markets. They are nothing new and there have been rivers of ink written about them. We are going to review them quickly and then move forward.
Economic decisions
A free market is composed by people voluntarily exchanging goods and services. This exchange is done with the implicit and explicit purpose of gaining an advantage.…
Lesson #114 - Introducing Mr Free Market - Part 1
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We have talked a lot about markets but we never quite defined them. At its most basic, markets are simply a group of people exchanging goods and services. Why should such a group have special and beneficial characteristics? This is what we are going to study today by introducing Mr. Free Market.
FREE MARKETS
Definition
Since the day humans started to study the economy, there has been a gigantic number…
Lesson #113 - Taxes And Myths - Part 7
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EXOTIC TAXATION
In Theory
Over the years, there have been many different types of taxation but most of them fall within the previous classes or are combinations or derivations of them. There are two however, that are worth mentioning:
- Voluntary Taxation: as it name implies, taxes are paid on a strictly voluntary basis since there is no coercion. Most governments are against this form of taxation simply because their income…
Lesson #112 - Taxes And Myths - Part 6
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INFLATIONARY TAXATION
In Theory
Economists and politicians understand full well what inflation is and how it works, but they have two different justifications for it. For politicians it is quite easy; inflation simply means new money they can use to purchase votes. For economists, it is the correct approach to take to prevent busts when economies begin to slow down.
As we have previously written quite extensively, inflation is simply…
