Flame — HabitableZone

Flame » in reply to re: Heinlein on economics

The wise man doesn't know how markets work.

"Nobody in business wants to submit to a market that, in the classically simple-minded formulation, minimizes profit and in which the consumer always benefits at the expense of the seller. Business is about defeating the laws of the free-market to maximize profit, not playing nice and settling for a statistical average profit and marketshare."

Market forces don't work because everybody gets together and plays nice, any more than the ecology of the African plains works because all the animals decide ahead of time not to eat too many of each other.

A business can go for the highest profit possible, but if he charges to much, or sells crap, it's going to come back and bite him. The consumer tends to benefit, but the consumer isn't going to walk off with all the chips either.

It's a balance, and it works best when people aren't trying to pile all kinds of extra crap on it to tilt in in their direction. Without interference, it's very difficult to consistently defy the laws of the free market. When you look at the abuses, most of the time they were enabled by special government privileges, i.e. the use of force (licensing requirements, tax goodies, subsidies, legal monopolies, or outright legislation against competition.)

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