Harry Pollard wrote:
>
> Tom,
>
> Wow! This is a good post.
>
> You assert the invisible hand is "asserted repeatedly by market utopians AS
> IF it was an irrefutable argument".
>
> How is it not an irrefutable argument?
>
> Premise is that in a trade, both sides are better off - or they wouldn't
> have traded.
>
> Agreed?
How is it you say Tom's post is good?
As I read it, he is saying even Adam Smith himself
didn't put much credence in the invisible hand.
He then goes on, as I read it, to say that the
free market is a myth, and that the whole
point of competition is " about trying to gain
market advantage through non-price means".
He ends with: "All the invisible hand
does in this case is shuffle the shells that conceal the pea."
Were you being ironic in praising Tom's posting? If yes,
your posting is an admonition to me to try not to be
pointlessly churlish in my own postings.
Thanks in advance for clarifying what you found so good
about Tom's posting. I found his posting good
because I found his arguments against the
market/invisible hand -- or at least
debunking their ideological use in our
society -- enlightening. Am I wrong here?
"Yours in discourse...."
\brad mccormick
>
> So, with one hundred trades, or a thousand trades, or a million trades,
> everyone is still better off. It does nothing magically, though saying so
> goes over well with the masses.
>
> Does a million trades describe a big enough community for you? For
> apparently the community - which consists of those people - is inevitably
> better off.
>
> You say: 'the argument is "irrefutable" in that it doesn't contain enough
> substance to hang a refutation on.'
>
> That's the kind of statement one makes when one is unable to refute
> something - which can be expected with an argument so plausible and
> irrefutable. Maybe these trades produce a synergistic effect that accounts
> for the "unintended aggregate outcome" you mention.
>
> I think such a synergistic result is very likely. Don't you, when people
> are freely interacting in community?
>
> You ask for empirical evidence. Just visit a few neighborhood computer
> shows, where everything is around half-price, where people are snatching up
> equipment they couldn't otherwise afford. If we assume that the community
> is better off when computer use is widespread, the computer market is
> improving the well-being of the community. Think of all the people who can
> then pick up and read what I write.
>
> Yes, there is no doubt the community is better off.
>
> Then you veer off into prices. A price is no more than the value of
> something in terms of a standard measure.
>
> It makes trading easier. How many pens are worth a barrel of fish? Well the
> barrel is worth $100 and the pens are worth a dollar each. Hence, the
> barrel is worth 100 pens. That's where the higgling begins.
>
> Let's not make prices something mystical.
>
> But, you declare:
>
> "In the real world, price ALWAYS conceals externalities, monopolistic
> pricing power, government subsidies and favours, etc."
>
> How can price ALWAYS conceal these things if you know about them? Or, maybe
> you are the only one who knows about these things and the rest of us are
> simply ignorant. Then it's up to you to tell the rest of us about these
> things - specifically, or course.
>
> A favorite example of mine, as you know, is the Sugar Quota that forces us
> to pay two or three times the world price for sugar - a circumstance which
> makes us pay through the nose for everything that contains sugar (which is
> practically everything). The actual difference seems higher. When
> Lifesavers closed it's factory and moved to Canada, it changed from paying
> 27 cents for sugar to 7 cents. As Lifesavers are 95% sugar this was
> somewhat important.
>
> Will you insist on blaming the price of Lifesavers - or will you blame the
> Sugar Quota? It's your call.
>
> Your last paragraph is a bit messy - you bring "subsidy" in from out of the
> blue. Don't know where it came from - but I suppose you do.
>
> However, you talk of non-price means of achieving a profit. I don't know
> why. The way you achieve a profit (or avoid failure) is by satisfying the
> buyers. If you have the only blue dress shoes on the market and people want
> blue dress shoes, you'll do well and no doubt you will charge more for the
> service. So?
>
> I was a professional sales representative in England during my 20's and in
> Canada during the 30's. One of my jobs was servicing schools and hospitals.
> I made a practice of selling the most expensive detergent around. It was
> called H3 - hardly a glamorous name. Made a lot of money, which allowed me
> to get my family over from England and into a new house.
>
> How did I do it? The problem schools and hospitals have is the waste of
> cleaning materials. To make sure the cleaning is effective, the maintenance
> people throw a lot of detergent in their pails and scrubbers.
>
> H3 was probably the best detergent cleaner around but it had a problem - it
> foamed a lot, sending bubbles and suds all over the place - a thorough
> nuisance. I used that to advantage. I pointed out to purchasing agents that
> because it foamed so much, janitors would be unable to use a lot. A smaller
> amount would still clean better than most other detergents, but economy
> would be forced on the cleaners.
>
> So the 45 gallon drums went rolling out of my factory out to hospitals and
> Boards of Education everywhere.
>
> So, what else is new? The combination that sells at the market is quality
> and price.
>
> We all of us are car makers, or jockey short producers, or apple growers,
> or hairdressers, or bus drivers - but every one of our 280 million or so is
> a consumer. The market process acts to provide us the best quality at the
> lowest price. So, the well-being of the whole community is thereby enhanced
> - for the community is all these individuals.
>
> It's almost like an 'invisible hand'.
>
> Harry
>
>--------------------------------------------------------------------------------------
>
> Tom wrote:
>
> >Emma Rothschild has argued that Smith probably intended his Invisible Hand
> >comment as a kind of ironic joke ("The Bloody and Invisible Hand" in
> >_Economic sentiments : Adam Smith, Condorcet, and the Enlightenment_,
> >Harvard University Press, 2001). Although that interpretation cannot be
> >proven, it seems more plausible to me than the dominant interpretation that
> >the market magically transforms a plethora of self-interested transactions
> >into an unintended, socially-beneficial outcome. Reading Smith, I get the
> >impression he is saying an unintended aggregate outcome *can* happen.
> >Getting from can to must is a logical leap that 1. is not supported by what
> >Adam Smith wrote and 2. is not supported by empirical evidence, but 3. is
> >asserted repeatedly by market utopians AS IF it was an irrefutable argument.
> >
> >In a way -- ironically -- the argument is "irrefutable" in that it doesn't
> >contain enough substance to hang a refutation on. If the utopian conditions
> >posited for the invisible hand workings of a free market to function
> >actually existed, prices would not be necessary. A pure gift economy could
> >equally function under such ideal, omniscient conditions. In other words,
> >prices could only ever be "true" if they were also superfluous. In the real
> >world, price ALWAYS conceals externalities, monopolistic pricing power,
> >government subsidies and favours, etc.
> >
> >The myth of the free market has this in common with Sorel's "myth of the
> >general strike": it could only occur if the conditions already existed that
> >made it unnecessary. Competition is fundamentally about trying to gain
> >market advantage through non-price means.Think about it. If I can achieve
> >greater sales through some other means than simply lowering my price, I will
> >make a bigger profit. Those other means may enable me to nominally lower my
> >price, so I can point to that nominally lower price (rather than, say, a
> >subsidy) as the reason for increased market share. All the invisible hand
> >does in this case is shuffle the shells that conceal the pea.
> >
> >
> >Selma Singer wrote,
> >
> >
> > > I haven't been reading too many of these very carefully so just delete
> >this
> > > if it has been mentioned before, but has anyone mentioned (in the context
> >of
> > > this invisible hand and free competition, etc.)corporate price-fixing,
> > > government bail-outs of failing corporations,etc.etc.? How do these things
> > > fit in this'free', 'competitive' market'? do these things and the myriad
> >of
> > > other dynamics like them not interfere with the 'free', 'competitive' part
> > > that is supposed to control this invisible hand?
> > >
> > > Selma
>
> ******************************
> Harry Pollard
> Henry George School of LA
> Box 655
> Tujunga CA 91042
> [EMAIL PROTECTED]
> Tel: (818) 352-4141
> Fax: (818) 353-2242
> *******************************
>
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--
Let your light so shine before men,
that they may see your good works.... (Matt 5:16)
Prove all things; hold fast that which is good. (1 Thes 5:21)
<![%THINK;[SGML+APL]]> Brad McCormick, Ed.D. / [EMAIL PROTECTED]
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