catallaxy files

catallaxy in technical exile

Open Forum 16/12/06

with 79 comments

[Apologies for hijacking Jason’s open forum, but I thought I’d just drop in a reminder for tonight’s blogbash at the Clock Hotel. Kick off is at 8:30, and I’m really looking forward to catching up with everyone – SL]

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Written by Admin

December 16, 2006 at 8:45 am

Posted in Uncategorized

79 Responses

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  1. People should check out Sinclair’s debunking of Rudd on Hayek in yesterday’s Fin. Brilliant work.

    C.L.

    December 16, 2006 at 2:18 pm

  2. Put it up, CL

    I only spend money on Fairfax in a way that damages them. They lose money with The Age and SMH on circulation. So everytime one buys one of these papers it hits them on the bottom line. ThereforeI buy one these.

    They make money with the AFR so I will never buy that publication.

    JC.

    December 16, 2006 at 2:33 pm

  3. Unfortunately, the AFR lives behind a subscription wall and the Review section doesn’t seem to be online at all!

    Some quotes,
    [From Hayek] “Differences in wealth, education, tradition, religion, language or race may today become the cause of differential treatment on the pretext of a pretended principle of social justice or of public necessity. Once such discrimination is recognised as legitimate, all the safeguards of individual freedom of the liberal tradition are gone.”
    In short, only an omniscient, omnipotent government pursuing neo-apartheid policies of discrimination among its citizens could ever hope to implement policies that would lead to social justice. Despite this condemnation, it is Rudd who describes Hayek as being an “unrepentant social engineer”.

    [From the conclusion] In conclusion, Kevin Rudd wishes to engage the right in a debate on values. That is his job. It is not clear, however, that he has chosen his battleground carefully.
    He has not understood, or even discussed, the essential elements of the Hayekian orthodoxy, which revolve around dispersed information and knowledge.
    Rudd should approve of Hayek’s concern about unlimited government, and his robust defence of democracy as a dynamic institution. Contrary to Rudd’s assertions Hayek, unlike many non-believers, is sympathetic to religion, in particular the monotheistic religions.
    Further, Hayek has a lot to say about government intervention in the economy and is not inherently hostile to government per se. Indeed, he justifies more intervention than does Adam Smith. Where Hayek and Rudd part company is in the notion of social justice.
    Hayek is brutal in his rejection of that principle; it is unworkable and immoral.
    It is clear that the left need to engage in some ideas, it is not clear that attacking a straw Hayek will advance their cause very far.
    Hayek may well be widely quoted, but unfortunately he is not widely understood. Rudd’s efforts are proof of this point.

    Sinclair Davidson

    December 16, 2006 at 3:54 pm

  4. Sinc

    That was an absolutely perfect slam job. He’s out for the count.

    Great job, bro.

    JC.

    December 16, 2006 at 4:47 pm

  5. There is this article of Sinclairs: http://tinyurl.com/y696b3

    and the following rebuttal: http://tinyurl.com/y4tjrk

    Everbody is saying that the free market has failed but concrete examples remain elusive.

    rog

    December 16, 2006 at 4:53 pm

  6. Rog – I had a busy week with the op-ed in The Age and the longer piece in the Fin Review.

    I saw the ‘rebuttal’, but decided to let it go. A bit of a moral dilemma actually. If I reply and belt him up a bit and show him up, I look churlish, on the other hand promoting free markets requires relentless action, running the dumb ideas down, doing the one percenters and hard-ball gets.

    Sinclair Davidson

    December 16, 2006 at 7:02 pm

  7. I find it difficult to counter the emotional argument; was the advent of containerisation a market failure for Liverpool? (the same could be said for the train line to Port Melbourne that cut Adelaide out of the picture – but who would dare criticise rail)

    rog

    December 16, 2006 at 7:12 pm

  8. Sinc

    What was The Age piece…. and the rebuttal?

    Can we see it… link?

    I’d love to see that hosing.

    JC.

    December 16, 2006 at 7:41 pm

  9. It was in the age – click on the links rog’s post 5.

    Sinclair Davidson

    December 16, 2006 at 8:16 pm

  10. Good for you Sinclair.

    It was a good piece.

    JC.

    December 16, 2006 at 9:29 pm

  11. Thank you. – A reply of sorts will come when I present a paper at an IPA conference in February of progressive influences on economics education. So why are textbooks full of ‘market failure’, etc.?

    Sinclair Davidson

    December 16, 2006 at 9:32 pm

  12. You know, Sinc, I once Dmaien Eldridge to define and give an example of market failure after he casually brought it up.

    He sounded like a spluttering two stroke when he was asked to defend his positon.

    There’s no such friggen thing as market failure. There’s only personal perference of outcomes.

    Ask any twot to give examples of market failure……They can’t.

    There’s tort law to compensate people if they feel they have not received their side of the bargain.

    JC.

    December 16, 2006 at 10:05 pm

  13. Don’t watch the video.

    Just lie down with our eyes closed and listen to the South American brass and the lyics.

    One look at the vid will spoil the song for you.

    IT USED TO BE ABOUT THE MUSIC!!!

    GMB

    December 17, 2006 at 6:37 am

  14. Stiglitz gives an example of market failure as that being due to privatisation,

    “….The United States has deregulated and it has been a disaster in most parts of the country. Electricity prices are going up, there are black outs, brown outs, companies has gone bankrupt, the Government has had to bail out companies, Enron manipulated the energy prices. I think we would have to say it has been a disaster……

    …..The likelihood you can do better than with your current system, in France, is almost zero. The likelihood it will do worse is very high. Anybody objectively looking at the current system in France would say “it’s the most foolish idea I ever heard”. You have an efficient system that is reliable and there is no indicator that it’s about to have a problem. So why privatize? To me, the record of privatization is so bad and the record of France is so good that you have to scratch your head and ask what is the ideology behind this….”

    http://www.humaniteinenglish.com/article449.html

    Its an apples with oranges argument, the US is “united states” and the valid comparison would be the EU, of which France is a state.

    EU has recently copped a heap of blackouts eg;

    “A surge in electricity demand in Germany due to cold weather triggered blackouts across western Europe, leaving about 10 percent of French consumers without power, electricity operators said.

    “We weren’t very far from a European blackout,” Pierre Bornard, a member of the board of directors of the French power company RTE, told AFP.

    The German energy company RWE said the trouble was due to a surge in demand late Saturday evening when temperatures plummeted to the freezing point.

    Insufficient power supply first triggered blackouts in parts of western Germany, particularly in Cologne, and then across France as the French electricity company EDF tried to meet surging consumer needs….”

    http://archive.turkishpress.com/news.asp?id=149766

    Failure of the common market?

    rog

    December 17, 2006 at 7:14 am

  15. JC what do you define as market failure? Under your definition it sounds like even price fixing won’t cause it.

    Steve Edney

    December 17, 2006 at 12:13 pm

  16. Steve

    Price fixing …. as in what?. Two more firms “colluding”.

    It’s always interesting to visualize firms actually trying to set or fix prices. The real question should be, are they able to? And the answer is that, no, firms cannot set prices for any indefinite period because cheaper producers make their way in or substitutes are quickly introduced. It is impossible to set prices without a government license.

    The easiest way to see this is through mergers and acquisitions. Firms are constantly buying up competitors. Anyone who thinks collusion is an attainable long- term objective would also have to argue against all mergers or acquisitions on the basis that it permanently reduces competition and thereby affects the proper functioning of the price mechanism.

    Even having one firm in the market as the supplier does not mean prices are adversely affected. That lonely producer has to set prices at a level that dissuades competitors from coming in and competing away large profits.

    Market failure is another way of describing the failure to allocate effective property rights.

    The answer to your question is that there is no such thing as amrket failure in a free unhampered market where prices are not influenced by government madate or license agreement.

    JC.

    December 17, 2006 at 1:52 pm

  17. Market failure is said to be associated with R&D. The IPA published something of mine on this very point. I also have a piece on the myths of R&D coming out in the next issue of the IPA Review.

    http://ipa.org.au/publications/publisting_detail.asp?pubid=611

    Sinclair Davidson

    December 17, 2006 at 2:34 pm

  18. Now for important news:

    Alistair Reynolds (the British Sci-Fi author) is coming to Australia in early January. He’ll be appearing in Canberra (poor guy) and Sydney. His stuff is excellent (Galactic North is available via the UK Amazon, but not the US). So if you enjoy Sci-Fi but haven’t read him, give it a go.
    http://members.tripod.com/~voxish/

    Apart from (re-)reading a lot of Hayek these last few weeks, I’ve also read Dan Simmon’s Illium and Olympos . Very enjoyable (not as good as the Hyperion cantos). I suspect there may be more books coming in this series. My only complaint is that he wrapped things up a little too quickly. Wrapping up too quickly is something Peter Hamilton does, but he also is worth reading.

    Sinclair Davidson

    December 17, 2006 at 2:42 pm

  19. Ok so you are saying it can happen but there is no market failure without some sort of government intervention.

    I would have thought things like information asymetry would make it occur naturally. Whether an intervention by government can improve this situation is another matter.

    Steve Edney

    December 17, 2006 at 4:07 pm

  20. Can you think of any examples Edney?

    Examples of grave and damaging market failure not arising directly or indirectly out of the preceding decades of bully-boy silly-buggery?

    GMB

    December 17, 2006 at 4:53 pm

  21. Asymmetric information does not imply market failure.

    i) Define market failure.

    ii) Define market failure as implied by asymmetric information.

    I think you will find they are actually different.

    Furthermore, there are information markets.

    Mark Hill

    December 17, 2006 at 7:20 pm

  22. 1) As I understand it, market failure is when a market is failing to distribute goods in a pareto-efficient way. ie. There are trades that could take place that would make some participants better off without making any worse off.

    2) Information asymetry can make participants unwilling to make trades as they may not be getting the deal they think they are getting. Thus trades that would take you to pareto-efficiency are not done and the market has therefore failed.

    There are information markets, but what is that meant to prove?

    Steve Edney

    December 17, 2006 at 9:01 pm

  23. 1. Pareto-efficiency is no way to judge anything. Its arbitrary. Maybe you could use it to help you judge the order of when you are cutting taxes or something. It doesn’t enter into what we are talking about.

    2. “Information asymetry can make participants unwilling to make trades as they may not be getting the deal they think they are getting.”

    Thats pretty bizzare. Any good businessman knows that the best customer is the repeat customer.

    But good economic management is really mostly about the clarification of property rights.

    So what are you really talking about here Edney. Are you talking about fly-by-nighters and ripoff artists?

    It might be that such people would be involving themselves in fraud and property-rights violations.

    CAN YOU GIVE US SOME EXAMPLES.

    Where are these villainous pareto-inefficient trades that are turning people into frightened trading wallflowers?

    Can we think of any of these pareto-inefficient trades at some earlier time in our history?

    GMB

    December 17, 2006 at 9:27 pm

  24. Well I started by asking the question about what people meant by market failure for this reason.
    My understanding of what the term meant is basically the definition I gave and it seemed to be corect when I just checked it. You can quibble about the usefulness of the definition but my understanding is that is what is meant when an economist says “market failure”. I’m happy for someone to correct me. Of course if there isn’t an agreed to definition then its no point arguing as we’ll all be right by our own definitions.

    Anyway not all markets involve repeat business. Buying a used car privately would be one such market indeed one of the classic examples of this problem.

    If I am unsure of the quality of the car I am buying, as it might be a lemon, I will pay less accordingly to factor this risk in. As a result the good cars won’t sell, and only the lemons will be offered, which depresses the price further. Thus trades of the good cars won’t take place even though there are people who would want to make the exchange, the risk they are being decieved is too high.

    A dealer can partially avoid this by offering warranties (as well as business reputation), but its more difficult for a private sale.

    Steve Edney

    December 17, 2006 at 9:53 pm

  25. Asymmetric information is more of a theoretical problem than a practical problem. It does arise in the instance of insider trading, but in most other instances market mechanisms evolve to reduce or eliminate it as a problem. So yes, think about asymmetric information but don’t worry too much about it.

    The issue about Pareto optimality is a bit more interesting. As a tehoretical construct it is useful for teaching economic thinking. I’m not sure how valuable it is as a guide to policy making. Gordon Tullock argues it is entirely useless. I tend to osiliate between thinking it is either trivial or extremely onerous. either way, in a world populated by mere mortals we don’t need to worry too much about it.

    The real issue is identifying actual instances of market failure, not government failure. Market failure has to be something other than the market not working the way one would like it to work. Remember mcCloskey wrote a book with the title “If you’re so smart, why aren’t you rich?” If you know of a market falure, why aren’t you rich? The notion that the market can fail for longer than you can remain solvent doesn’t cut it.

    Sinclair Davidson

    December 17, 2006 at 9:57 pm

  26. Ok I have to say I confused.

    If we don’t have to worry about pareto optimality, what is your definition of market failure?

    Steve Edney

    December 17, 2006 at 10:13 pm

  27. Just on a very quick skim of the last few comments, wouldn’t information assymetry exist in something like a little old women not knowing that fixing a car usually costs $X and the car repairers wanting to take advantage of this by offering $2X? (Actually this happened recently to someone I knew.)

    However, a friend of the little old women might tell her that others charged $X, giving her enough information to make an informed decision. The point about this is that it would have been very easy for her to not be aware of all relevant information.

    I don’t know if this is relevant to the discussion at hand, but thought I’d offer it nonetheless.

    Sacha Blumen

    December 17, 2006 at 10:19 pm

  28. “If you’re so smart, why aren’t you rich?” If you know of a market falure, why aren’t you rich?

    Ahhh… I’m working on it!

    Sacha Blumen

    December 17, 2006 at 10:27 pm

  29. Sasha – that would be an example used in discussing market failure – but your friend should get her car serviced by a reputable accredited car dealer. So the accreditation market evolves to overcome that problem (so NRMA or RACV or RACQ accredit dealers, so places like KMart offer car services).

    Sinclair Davidson

    December 18, 2006 at 6:51 am

  30. Steve – market failure is like vampires and ghouls etc. A theoretical problem at best. In reality market failure is a rare beast – when spotted it is often associated with some sort of government intervention.

    I don’t think it’s well done (or, at least, it could have been a lot better) but see
    http://www.amazon.com/Markets-Dont-Fail-Brian-Simpson/dp/073911364X/sr=8-1/qid=1166385347/ref=pd_bbs_sr_1/105-9184746-0249258?ie=UTF8&s=books

    He’s a bit long on polemic and short of analysis, but the answers are correct.

    Sinclair Davidson

    December 18, 2006 at 6:56 am

  31. SD:
    >Steve – market failure is like vampires and ghouls etc. A theoretical problem at best.

    Perhaps there is confusion over the two senses of “market failure.”

    As the Wiki points out, there is the mainstream economics sense ie. a failure to allocate goods efficiently. Then there is the more general sense, situations where “market forces do not serve the perceived public interest.”

    Daniel Barnes

    December 18, 2006 at 7:52 am

  32. For a mainstream view on market failure, see:

    http://economicsgeek.blogspot.com/2006/10/what-is-market-failure.html .

    Even in an economic sense, market failures are not just some theoretical possibility. They can and do occur in practice. Examples include global warming, acid rain, over-fishing, various missing insurance markets and various successful attempts to use market power.

    Damien Eldridge

    December 18, 2006 at 9:08 am

  33. Just to clarify, the views expressed in the link in my previous comment are my own views. I labelled them as mainstream because I consider myself to be a fairly mainstream economist. I also think they are fairly reflective of the the mainstream view of market failures within the economics profession. However, I should probably leave it up to others to decide for themselves whether my views are representative of those held by most mainstream economists.

    Damien Eldridge

    December 18, 2006 at 9:15 am

  34. It is silly for libertarians to deny that markets can fail to some degree and construct strawmen on what people mean by that. Austrian economics is unfalsifiable in the way it addresses these issues and really can’t be taken seriously as anything more than metaphysics and theology and will never advance as a science because of the way it likes to play word games.

    Whether there are policy implications from market failure is a separate question and this will be a case by case judgement.

    Jason Soon

    December 18, 2006 at 9:31 am

  35. Asymmetric information is more of a theoretical problem than a practical problem. It does arise in the instance of insider trading, but in most other instances market mechanisms evolve to reduce or eliminate it as a problem. So yes, think about asymmetric information but don’t worry too much about it.

    Asymmetric information is the reason why libertarianism is completely impractical.

    Aymmetrical information is a theoretical problem in the same way that speed is theoretically fatal. True, falling off a cliff or driving quickly isn’t fatal of itself, but the increased likelihood of collision under those circumstances makes it fair to say, however imprecisely, that “speed kills”. So too, asymmetric information undermines any possibility of winding back a whole raft of “protective measures” introduced by government, not least in the highly protected non-market trading environments for shares and other financial instruments.

    Andrew Elder

    December 18, 2006 at 9:48 am

  36. global warming, acid rain, over-fishing, various missing insurance markets and various successful attempts to use market power.

    Damien’s views are mainstream – happy to concede that point.

    The first first two (to the extent they actually occur) are failure to specifiy property rights, the third is purely a property right/ownership problem, ‘missing’ insurance markets are a value judgment – if you think toy can earn a dollar providing insurance please do so. i don’t understand what ‘abuse’ of market power means. Consumers have choices.

    Bear in mind, however, if I were teaching undergraduates, I would follow the mainstream views (and the textbook).

    Sinclair Davidson

    December 18, 2006 at 10:38 am

  37. Sorry, ‘toy’ should be ‘you’

    Sinclair Davidson

    December 18, 2006 at 10:39 am

  38. Great post, Andy, as always. You are a fount of informative dialogue.

    JC.

    December 18, 2006 at 10:59 am

  39. Edney sez:

    “If I am unsure of the quality of the car I am buying, as it might be a lemon, I will pay less accordingly to factor this risk in.

    As a result the good cars won’t sell, and only the lemons will be offered, which depresses the price further.

    Thus trades of the good cars won’t take place even though there are people who would want to make the exchange, the risk they are being decieved is too high.

    A dealer can partially avoid this by offering warranties (as well as business reputation), but its more difficult for a private sale.”

    So I sez:

    Right. But its not like you are going to spend all our national wealth trying to get the government too much involved in the used car market is it?

    Nor are you going to work a great deal at trying to get things going better at Ebay.

    All you are going to do is to keep reducing and refining the regulations to do with property rights, to keep getting these regulations clearer, more easily understandeable and to get less of them.

    The most important of these is clarification of property rights insofar as it relates to money-creation.

    Eldridge sez:

    Examples include global warming, acid rain, over-fishing, various missing insurance markets and various successful attempts to use market power.

    I sez:

    1. Global warming isn’t a market failure. But industrial CO2-release IS a postive externality.

    2. Acid rain is an overblown problem and largely the result of government regulation.

    Yet if it did become a problem it would amount to one group despoiling another groups property rights. So its just back to the clarification of property rights that we turn.

    Such problems, insofar as they exist at all and aren’t ecological scaremongering, are likely to be transitory.

    Perhaps its true that a sunsetted pollution tax might be useful in one or two cases. But never for CO2 which is a positive thing.

    3. Overfishing isn’t market failure. Its the ‘tragedy of the commons’ The fish and fishing grounds aren’t private property.

    4. Various missing insurance markets?…. Well the need for insurance is overblown by lower savings rates which are resultant from Keynesianism and currency debauch. Decades of both.

    But these allegedly missing markets cannot be unbundled from interventionist silly-buggery. Yet one might wish to see some examples for this allegation.

    5. Various successful attempts to use market power.

    I’m calling horseshit on this one. If you are in a situation of growth-deflation monetarily. And you have clarity in property rights and a free economy…. then what grave and damaging examples of this might you suspect?

    >>>>>>>>>>>>>>>>>

    Elder you are talking nonsense.
    Try and get it down to examples and you will see this. Its just another straw man to use for you to justify stealing.

    Today its assymetrical information. Tommorrow it will be something else.

    Pareto-efficiency?

    RIGHT THEN WE WERE RIGHT ALL ALONG WE CAN STEAL.

    Information assymetry:

    RIGHT THAT MEANS WE CAN STEAL.

    My dog is sick:

    RIGHTO LETS GO AND STEAL SOMETHING.

    Where is your argument?

    More generally there doesn’t seem to be a real argument here. Pareto-efficiency and the alleged problem of information assymetry pulled out of the air.

    Yet where its not from interventionist silly-buggery or from lack of clarity in property rights the best example we could come up with that had any plausibility was our thriviing used-car market.

    And this example hardly is a poster-child for the advocacy of governmental bully-boy silly-buggery

    GMB

    December 18, 2006 at 11:15 am

  40. nope, it’s not an excuse for stealing, Graeme.
    Let me repeat what I said:
    Whether there are policy implications from market failure is a separate question and this will be a case by case judgement.

    Jason Soon

    December 18, 2006 at 11:17 am

  41. I’ll repeat, there is no such thing as market failure. It is for those who tell us there is to prove it.
    Eldridge’s comment are nonsense. He is simply using his personal preferences to pass judgement on what he thinks is “market failure”.

    Give me one exmaple of a market that has failed, Eldridge. One. And no bullshitting around. One that simply isn’t your personal preference.

    I don’t like the way my neighbor leaves his garbage can to be collected every week. He leaves it on my side of the nature strip.

    I guess it is market failure I wasn’t able to find a better neighbor to live beside according to Eldridge.

    This concept cannot ever be conceded to the left as they would categorize almost everything as market failure…. and they do.

    They think adjusting market failure is having a shit for brains KRudd and his incompetent gal friday telling us what to do.

    JC.

    December 18, 2006 at 11:29 am

  42. Its just an excuse for stealing Soon.

    Insofar as it exists at all information assymetry is trivial in its policy implications, or comes from lack of clarity in property rights, or it is resultant from prior years of interventionism (ie bully-boy-silly-buggery.)

    Or if not give us some examples.

    I mean I accept that the used car market is a pretty good example.

    Have we any others?

    GMB

    December 18, 2006 at 11:33 am

  43. for pete’s sake JC go to ANY micro-economics textbook and look it up.

    Don’t make such stupid remarks. The market is the best thing we have going for us but to ignore it failures simply means your are either ignorant, stupid or just plain indifferent.

    Bring Back CL's Blog

    December 18, 2006 at 11:40 am

  44. Steve Edney says:

    “1) As I understand it, market failure is when a market is failing to distribute goods in a pareto-efficient way. ie. There are trades that could take place that would make some participants better off without making any worse off.

    2) Information asymetry can make participants unwilling to make trades as they may not be getting the deal they think they are getting. Thus trades that would take you to pareto-efficiency are not done and the market has therefore failed.

    There are information markets, but what is that meant to prove? ”

    i) Name some goods that when provided publicly, are Pareto efficient (their allocation betters some without making others worse off).

    ii) Asymmetry problems are a problem you just have to face up to. No feasible Government action would make the market for second hand cars any better.

    The example of a non-existent second hand car market for good vehicles simply isn’t true. Look at private sales and auctions. People pay a discount to make up for potential repairs, but you can still get cars within the last 10 years of manufacture for a very consumer-surplus adding price. The auctioneers make money because they are selling a set of attributes that change and therefore they can profit from buying from one set of consumer preferences to another.

    Daniel Barnes says:

    “Perhaps there is confusion over the two senses of “market failure.”

    As the Wiki points out, there is the mainstream economics sense ie. a failure to allocate goods efficiently. Then there is the more general sense, situations where “market forces do not serve the perceived public interest.””

    Precisely. Take for example defence. First of all, it is silly to talk about defence and pareto optimality. No other market is singled out like this e.g a Pareto efficient market for oranges because you can only have such efficiency across a range of goods in some kind of generalised equilibrium. Furthermore, there is a satisficing level of defence, and most other goods can be supplied to infinity and people will not be satisfied (including quality improvements). Importantly, the quality of defence is what the arms races of the last century were about, improving quality may only engender an arms race and less efficient defence allocation.

    Then we simply have a scarcity issue so the further away we get from the original definition of a pure public good the more trivial the term becomes. Public perception is that the market or Government is not providing enough hospital beds. Besides the question of private vs public services, this is simply an issue of there never being *enough*. The market failing to provide something I want is not market failure.

    Market failures happen, but far less frequently than reported, several examples are actually bunk, the definition has become trivial in recent times and market failure is generally better than attempted intervention or Governmental failure.

    “Examples include global warming, acid rain, over-fishing, various missing insurance markets and various successful attempts to use market power.”

    Have to agree with Sincs. Also note the role of subsidies in contributing to an inefficient level of pollution.

    Andrew Elder:

    The financial markets are a non-market? Insider trading doesn’t really protect anyone. Insider trading laws aren’t Pareto efficient anyway. When you get into the institutional problems of this law, it falls apart.

    As for “market power” noted by Damien and Andrew:

    Can you name an instance of a company which was not supported by Government franchise that abused market power in the long run? How exactly did they abuse market power, and did the existence of the firm offer any general efficiency advantages for society in the form of vertical integration?

    Mark Hill

    December 18, 2006 at 11:43 am

  45. No its you making stupid remarks.

    This is bad economics.

    I mean we know what they mean when they say these concepts.

    They just aren’t that important is all.

    Or perhaps you’ve got some examples of how they are important.

    GMB

    December 18, 2006 at 11:44 am

  46. This talk of assymetric information just seems to be pulled out of Frank Knights ethereal idea of perfect competition.

    GMB

    December 18, 2006 at 11:50 am

  47. I disagree that even fishing say is an example of market failure. I actually think government intervention has led to bad outcomes though licensing agreements.

    If an area becomes over fished the price mechanism will adjust for that and we end up with substitutes. Farmed prawn and other varieties of farmed fish is an example of that. As the price mechanism begins to price in scarcity we begin to see substitutes enter the market.

    A personal example:

    I have placed a small bet on a firm that thinks it can farm tuna. Tuna in captivity is a difficult fish to reproduce. However this firm thinks it overcome this problem through scientific method. This is another example of substitutes making there way into a market when the price mechanism adjusts for scarcity. We could have reached this point sooner if the government had simply not screwed around with licensing several years ago and made a few guys wealthy.

    Furthermore emissions are not an example of market failure and simply more of an example of personal choice. There is fully developed tort law that allows aggrieved parties to take civil wrongs to court and win an action. If any of you think the power company is casing you wrong through emissions take it to court and try to win an award.

    Again. It is up to anyone to prove there is such a thing as market failure.

    JC.

    December 18, 2006 at 12:03 pm

  48. ABL

    Elder is a waste of pixels. only repond to his silly comments to make fun of him, otherwise he is not worth wasting time over.

    JC.

    December 18, 2006 at 12:05 pm

  49. JC, good point, many public goods problems are static and not dynamic.

    Mark Hill

    December 18, 2006 at 12:06 pm

  50. GB is right. It seems all you who are looking under the bed for market failure are simply trying to explain deviation from reality and perfect comptetition.

    There is no such thing as pefect competition. It only exists in text books and campus grounds.

    JC.

    December 18, 2006 at 12:07 pm

  51. Yeah, I tried selling some shares, turned out I could only sell them through a certain person with a certaiin licence. It’s easier to sell a car than a share. I asked for some derivatives at my local supermarket, no luck. I even tried to do some currency exchanges – no can do.

    Any “market” that is so complacent that it can depress prices, or even stop competing altogether, in the lead-up to agreed holidays is a scam.

    When I hear people who work in these cosseted environments calling for deregulation, and other similar environments such as law and banking, I just laugh. Public schools and hospitals are much more open naked to the market than these clowns.

    Asymmetry problems are a problem you just have to face up to.

    Fine, you just can’t call for the dismantling of mechanisms that would protect consumers from these problems. And yes, problems they are.

    Insider trading doesn’t really protect anyone. Insider trading laws aren’t Pareto efficient anyway. When you get into the institutional problems of this law, it falls apart.

    OK, sure. Can’t remember advancing that argument, but let’s agree that straw man is down for the count – it’s not even registering a pulse!

    Mark: can you name a company that achieved a position of market dominance in Australia without also achieving support (however you might define that) from government franchise? I can’t, that’s why I can’t take to your challenge. I can’t define “the long run” either. No ideologue can. All abuses of power over the past century (at least) arose from some frustrated dictator attempting to obliterate short/medium term difficulties once and for all.

    Vertical integration is a matter for particular industries at particular times (and yes, particular regulatory environments). I don’t know how it applies here. Do you have an essay due?

    Andrew Elder

    December 18, 2006 at 12:18 pm

  52. Elder says:
    “Yeah, I tried selling some shares, turned out I could only sell them through a certain person with a certaiin licence. It’s easier to sell a car than a share. I asked for some derivatives at my local supermarket, no luck. I even tried to do some currency exchanges – no can do. ”

    You’re not selling your stock to the broker, dooffus. You’re selling it through him to another buyer. There is no law stopping you from finding your own buyer even by waiting at the supermarket for someone to turn up whose looking to buy BHP.

    Look, you complete idiot, of course you won’t be able to exchange foreign currency at a super market because of market specialization. Supermarkets are better at providing food than they are at selling foreign currency.

    “Any “market” that is so complacent that it can depress prices, or even stop competing altogether, in the lead-up to agreed holidays is a scam.”

    What the fuck does this mean? Can anyone even try to explain what is happening in the idiots brain?

    “When I hear people who work in these cosseted environments calling for deregulation, and other similar environments such as law and banking, I just laugh. Public schools and hospitals are much more open naked to the market than these clowns.”

    Banks and brokers would be the first to agree that the laws attending to their business are onerous. One of the reasons that business has become a relatively closed shop is because they have been able to better manage the masses of regulations doofuses like you request at the first sign a company has gone down the gurgler.

    “Mark: can you name a company that achieved a position of market dominance in Australia without also achieving support (however you might define that) from government franchise?”

    Yes. Numerous ones. Coke, Fosters, Coles. These are all marker dominant companies with little regulation. Just a small number that fell out of my head. Do you want more, doofus?

    “No ideologue can. All abuses of power over the past century (at least) arose from some frustrated dictator attempting to obliterate short/medium term difficulties once and for all. ”

    This idiotic statement proves Elder is a lunatic, or simply stupid. Can anyone figure out what it means?

    “Vertical integration is a matter for particular industries at particular times (and yes, particular regulatory environments). I don’t know how it applies here. Do you have an essay due? ”

    Do you have an appointment with an analyst? Because if you don’t you need to. This takes the cake for sheer nonsense. A bunch of monkeys sitting at a keyboard could come up with a better sentence than this… to at least make some sense.

    JC.

    December 18, 2006 at 12:41 pm

  53. You are severely confused Andrew.

    Financial regulation essentially sets up large barriers to entry. The regulation is in part due to concerns over consumer protection. Then you complain about both the barriers to entry and problems of an unregulated market. Make up your bloody mind.

    “Fine, you just can’t call for the dismantling of mechanisms that would protect consumers from these problems. And yes, problems they are.”

    No they are bloody not. Protecting consumers from the rationality of themselves and suppliers? A regulation against information asymmetry is good if it is feasible. How is any of this feasible other than disclosure and insider trading rules you are also arguing against?

    “OK, sure. Can’t remember advancing that argument, but let’s agree that straw man is down for the count – it’s not even registering a pulse!”

    Fine. You don’t understand that insider trading is efficient and the difficulties of applying the law, or how investors can trade between portfolio preferences and insider trading can help this (wich would be Pareto and Hicks optimal). I appreciate you don’t understand this and I really don’t care.

    I can’t name any firm that has actually abused market power which hasn’t been supported by the Government in some way because it doesn’t happen, and it cant happen dynamically. To falsify this, you come up with an alternative. I don’t have to. I am asserting the opposite.

    “Vertical integration is a matter for particular industries at particular times (and yes, particular regulatory environments). I don’t know how it applies here.”

    You are thoroughly confused because you don’t understand the benefits created by vertical integration. Again, your lack of understanding doesn’t take anything away from my arguments.

    Mark Hill

    December 18, 2006 at 12:44 pm

  54. ABL says:
    “Financial regulation essentially sets up large barriers to entry. The regulation is in part due to concerns over consumer protection. Then you complain about both the barriers to entry and problems of an unregulated market. Make up your bloody mind.”

    Your starting point premise is wrong, ABL. You’re assuming you’re dealing with someone who has more than a functioning brain stem.

    He doesn’t.

    JC.

    December 18, 2006 at 12:48 pm

  55. After one year of the Prime Minister’s Muslim Community Reference Group, the expenditure of up to $5 million in taxpayer’s money, and the work of dozens of Muslim leaders and advisers, all they have to show for it is this report. It’s a shopping list of demands for public funding — all suitably justified as being necessary to fight “extremism”.

    Here’s one such project:

    “Connectedness-Interdependence-Regard-Commitment-Love-Empathy (CIRCLE) The Australian Government, through the National Action Plan, funded the Islamic Women’s Welfare Council of Victoria to undertake a brief research and scoping project to ensure a best practice approach to implementing a series of CIRCLE workshops. “

    Amir

    December 18, 2006 at 1:44 pm

  56. “Yeah, I tried selling some shares, turned out I could only sell them through a certain person with a certaiin licence. It’s easier to sell a car than a share. I asked for some derivatives at my local supermarket, no luck. I even tried to do some currency exchanges – no can do.”

    Now in your stupidity and sarcasm you’ve wound up arguing for the other side.

    Do you want less or more regulation in the above cases.

    “Yes. Numerous ones. Coke, Fosters, Coles. These are all marker dominant companies with little regulation. Just a small number that fell out of my head. Do you want more, doofus?”

    But these are all examples of good work. They’re dominance comes from their success. Not their success from their dominance.

    And in any case they all have powerful competitors.

    You’ve lost the plot fella.

    Perhaps you are going to have to restate your case.
    >>>>>>>>>>>>>>>

    Mr Soon. Will you now admit that these are all straw men wheeled out for the purpose of justifying thieving and bully-boy-silly-buggery?

    After watching tax-eater-Elder at work, surely thats the message we’re getting here.

    GMB

    December 18, 2006 at 2:29 pm

  57. “Mr Soon. Will you now admit that these are all straw men wheeled out for the purpose of justifying thieving and bully-boy-silly-buggery?”

    Nope. Because demonstrating the existence of market failure is only the first step in making the case for regulation. It is a necessary not a sufficient condition.

    Jason Soon

    December 18, 2006 at 3:04 pm

  58. There comes a point where baiting people chained to an ideology loses its entertainment value. I’ll identify the issues that are important – any issue not addressed here can be considered a wind-up, or is so thickly covered in JC’s verbal guano that it is not worth saving. If you think JC has made a valid point, please translate it as I skip over his posts.

    Financial regulation … Make up your bloody mind.

    OK. I think the Australian stock market started out as a cosy club with few players, and is moving rapidly to a large and tumultous market with many players. There are adjustment problems with this process, particularly with this insistence that brokers must intervene between buyers and sellers. The existance of this essentially parasitic function might be sanctioned and enforced by regulation but I doubt that it was initiated by regulators. It will be interesting to see what happens from a regulatory point of view in the next market downturn.

    Mark, you seem to assume that I would regulate information asymmetry out of existance: a false assumption. I don’t think it can be regulated out of existence. However, it does exist and it impedes the working of a free market. A free market is an idealised state – like peace, love and understanding – that cannot be realised in our world, nor in our country. In an imperfect world, regulation is necessary. Current regulation may be effective or not, but there’s more to it than intellectual tidiness.

    Laws against murder do not prevent all murders, but there would be more of this unfortunate phenomenon were it not for regulation and state enforcement.

    You don’t understand that insider trading is efficient and the difficulties of applying the law

    To take your second point first I understand the difficulty of applying laws on insider trading. I think you expected me to defend the current system of regulating this, sorry to disappoint you. Insider trading is a feature of information asymmetry, which is itself inefficient.

    Efficient information flow makes insider trading impossible. I don’t think it’s “efficient” except in the sense of accruing benefit to insider traders.

    you don’t understand the benefits created by vertical integration.

    Vertical integration can be beneficial in some contexts, not beneficial in others. I have worked on projects where senior management is vertically-integrating like mad because their bonuses depend on it, but further down (below the bonus line) people who face customers find themselves constrained from servicing customers because of the quick-and-dirty process the vertical integrators have whacked in place. This is not to say that all vertical integrations are flawed, but it does mean that it depends on a whole lot of variables. I’d refer you to farmers who supply some of the large food producers/retailers as one example of both asymmetrical information and abuse of market power.

    Finally, JC: if you have to resort to abuse, you probably don’t have an argument. Thank you for supporting my blog (as if you have anything better to do!) but your attempt to link Osama bin Laden and Kevin Rudd was no more intellectually robust than anything else you do.

    Andrew Elder

    December 18, 2006 at 4:33 pm

  59. Your critcisms of the ASX are right but what you conclude with makes no sense (we need more financial regulation). Completely automated trades would see the ASX and broking houses die or change for the better. Trading costs in Australia would plummet. Deregulation of the financial market would make this happen, and player from outside the financial services sector might step in. Currently you need permission from the Treasurer to set up a capital market.

    A free market is simply a market which is unregulated. Regulations do not make it freer. After arguing against intervening to remove asymmetric information, you then argue that we need regulation to make markets work. Please explain.

    Insider trading is efficient. It allocates resources to their most sought after use. There was outrage when Rivkin sold Qantas shares whilst he was recommending their purchase. Forgetting day trading operations and the anonominity of the ASX, there was nothing inefficienct about this. People buy shares that are worthless to others because of different risk return profiles across whole portfolios.

    “Vertical integration can be beneficial in some contexts, not beneficial in others.”

    Where? Vertical integration only happens in the long run if it cuts down on transactions costs. Could you please justify the argument for increased transactions costs? If a firm loses flexibility it will demerge.

    ” I’d refer you to farmers who supply some of the large food producers/retailers as one example of both asymmetrical information and abuse of market power. ”

    This is complete and utter garbage. You are not buying potatoes from Woolworths. You are buying potatoes in centralised location from a reputable seller at a reasonable price and known quality, in a nice environment with networking effects such as the experience and range of other goods available. If farmers are going bust, they should grow something else. Buying goods in an industry where there are too may suppliers and offering the final good from this input with many other attributes is not an abuse of market power. As long as there are no barriers to entry, there will be competition. But in Australia there is simply a myriad of regulations on all competitors and especially on foreign investment. The very same regulations you are asking for to create a better market are putting consumers and producers at a disadvantage.

    Mark Hill

    December 18, 2006 at 5:08 pm

  60. Andy

    Having a debate with you is the wrong premise. It would like telling my dog i bought BHP today. What’s the point? He would never understand. Same with you.

    There is a point to be made in making fun of your posts. It allows people who have not already done so a chance to read the musings of nitwit.

    All I do is humbly point it out, so keep it going.

    JC.

    December 18, 2006 at 5:25 pm

  61. “There comes a point where baiting people chained to an ideology loses its entertainment value.”

    No. No no.

    Its not about being chained to any ideology bud.

    You just don’t have an argument.

    Your Jive comes from some defunct economist (Frank Knight). And it makes little sense in the real world.

    GMB

    December 18, 2006 at 5:34 pm

  62. Put simply, there’s a difference between what happens in theory and what happens in practice. If the devil is in the detail, then the impetus for effective regulation lies within that difference.

    A free market is simply a market which is unregulated. Regulations do not make it freer. After arguing against intervening to remove asymmetric information, you then argue that we need regulation to make markets work.

    The first two sentences relate to an abstract theory which has limited application in the real world. Firmly grounded in the real world, rather than abstraction, the third statement quoted above stands as an expression of the way things are. I said that regulation is necessary and that an absence of regulation would not actually lead to a truly free market.

    Insider trading is efficient. It allocates resources to their most sought after use.

    Simmon Hannes from Macquarie Bank accrued resources to himself on the basis of information entrusted to him for purposes more productive than self-enrichment. Others might have benefitted from had they not been legally prevented from acting upon it. Efficient from one individual’s point of view, but in a general, “long term”, market-wide perspective, it’s sheer piracy. Had Rivkin told the market about the information he’d received that materially affected Qantas’ share price, he’d deserve your defence.

    Vertical integration only happens in the long run if it cuts down on transactions costs.

    Sometimes, merchant bankers and lawyers encourage managers to act against the long term interests of their firms. After they’ve trousered their bonuses the inefficiencies become apparrent, and demergers do in fact occur, with a different lot of jokers but no net productive result. This process is often dressed up as reponding to a dynamic market, but it often isn’t really and with perfect information this would be more obvious.

    This is complete and utter garbage.

    You haven’t looked into the issue so you can’t make that call. I could explain it to you, but this would give rise to shrieking that I’m placing a pebble in the shoe of great forward strides of humanity. Your “reductions in transaction costs” are, in the context of plundering market inefficiency, someone else’s pitching below cost.

    You are not buying potatoes from Woolworths.

    You have no idea what my purchasing decisions are.

    All you can do, in the ignorance of the facts, is scramble up the sheer face of theory where details become indistinct:

    If farmers are going bust … too may suppliers … not an abuse of market power … no barriers to entry … a myriad of regulations

    Bloody economic libertarians! Hippies in ties, they are.

    I’ve led you to examples of asymmetric information as real-world market abuse, but you have chosen not to engage with them. They’re hard to face, especially when you’ve invested emotionally in a notion that it does not happen. I apologise if I’ve hurt your feelings Mark, but you must understand that imperfect information flows will give rise to regulation. Jason has said that one does not automatically invite the other, and this is fair, but it is foolish to deny the linkage.

    Andrew Elder

    December 18, 2006 at 5:41 pm

  63. Andy Elder says:

    “There comes a point where baiting people chained to an ideology loses its entertainment value.

    That’s you, doofus. You ideology is anti-market drivel and useless babble that confuses regulation with deregulation and deregulation with regulation. You’re numbskull, Andy. A first rate twit.

    “I’ll identify the issues that are important – any issue not addressed here can be considered a wind-up, or is so thickly covered in JC’s verbal guano that it is not worth saving. If you think JC has made a valid point, please translate it as I skip over his posts.’

    Andy, face facts, even the Libs must have thought you were as thick as a short plank which is good reason they gave you the boot. That act alone raised the parties IQ by 20 points. You don’t obviously skip over my posts as you seem to feel the need to comment.

    “OK. I think the Australian stock market started out as a cosy club with few players, and is moving rapidly to a large and tumultous market with many players.”

    So you want it back as a cosy karket that only WASPS are invited to, is that what you want? How is the fact that there are many players diadvantaging you numbnuts? I would have thought this was a good thing, but I guess more players in your bizarro world means less comptetition. Is that what you mean, numbnut?

    “There are adjustment problems with this process, particularly with this insistence that brokers must intervene between buyers and sellers. The existance of this essentially parasitic function might be sanctioned and enforced by regulation but I doubt that it was initiated by regulators. It will be interesting to see what happens from a regulatory point of view in the next market downturn.”

    Go ahead, dickhead. You can go online and trade with very liltle bro.

    I use a borker because the good ones are worth it as they make me money by presenting useful ideas to me that I hadn’t seen before. They also get me in good IPOS.

    “A free market is an idealised state – like peace, love and understanding – that cannot be realised in our world, nor in our country. In an imperfect world, regulation is necessary.”

    Sure it can. The second largest market in the world after the Fed funds market was the FX markets and it was one of the most efficient transparant markets in the world. It was only recent that these markets were regulated and I have no idea why there was such a compelling need to regulate them other than the need to cover backsides.

    “Laws against murder do not prevent all murders, but there would be more of this unfortunate phenomenon were it not for regulation and state enforcement.”

    You idiot. What useful comparison is there between a place where murder does not afford sanctions to the places murder is agaisnt the law. Numbskull, we’re talking about a useful fucntion here not one that takes lives. What a fucking idiot you are. It’s not even close to being analgous.

    “I think you expected me to defend the current system of regulating this, sorry to disappoint you. Insider trading is a feature of information asymmetry, which is itself inefficient.’
    Babble.

    “Efficient information flow makes insider trading impossible. I don’t think it’s “efficient” except in the sense of accruing benefit to insider traders. “

    There is no such thing as efficent flow of ionformation, dickhead. Even if we knew everythign there are still personal preferences. In addtion there s no such thing as perfectly informed markets. At least not in the real world.

    “Vertical integration can be beneficial in some contexts, not beneficial in others.

    Babble but we’r all ears, numbnut, so tell us……

    “I have worked on projects where senior management is vertically-integrating like mad because their bonuses depend on it, but further down (below the bonus line) people who face customers find themselves constrained from servicing customers because of the quick-and-dirty process the vertical integrators have whacked in place.”

    Andy, you don’t even understand what vertical integration means in an economics sense. I suppose those forms vertically integrated you when they realized what a total idiot you are….. out the door.

    “This is not to say that all vertical integrations are flawed, but it does mean that it depends on a whole lot of variables.”

    Abl, his talking about integrated kitchens here and not economics. He’s on the wrong website. He should have been onn the renovation webite.

    “I’d refer you to farmers who supply some of the large food producers/retailers as one example of both asymmetrical information and abuse of market power.”

    Ok. Example here , numbnut. I want to see specific examples where farmers lost out because their selling their produce “below market rates”. Eveidence here please.

    “Finally, JC: if you have to resort to abuse, you probably don’t have an argument.”

    Elder, you posts are themselves a form of abuse. They’re intellectually oppressive and we all feel it..

    “Thank you for supporting my blog (as if you have anything better to do!) but your attempt to link Osama bin Laden and Kevin Rudd was no more intellectually robust than anything else you do.”

    No, Andy. I would never support your blog. I simply made mention to the fact that you describe teenagers wearing Bin Ladin t-shirts and just being “cheeky”. It shows you have no moral appreciation that these “cheeky”teenagers, as you called them, are suporting a mass murderer.

    In other words, pou are nothing but an oppressively stupid , malicious little prick as well as being an exygen thief.

    JC.

    December 18, 2006 at 6:01 pm

  64. “Put simply, there’s a difference between what happens in theory and what happens in practice. If the devil is in the detail, then the impetus for effective regulation lies within that difference.”

    Can someone explain what this nimrod is saying?

    “The first two sentences relate to an abstract theory which has limited application in the real world. Firmly grounded in the real world, rather than abstraction, the third statement quoted above stands as an expression of the way things are. I said that regulation is necessary and that an absence of regulation would not actually lead to a truly free market.”

    Same question.

    “Sometimes, merchant bankers and lawyers encourage managers to act against the long term interests of their firms.”

    Ok. Examples here Numbnut.

    “After they’ve trousered their bonuses the inefficiencies become apparrent, and demergers do in fact occur, with a different lot of jokers but no net productive result. This process is often dressed up as reponding to a dynamic market, but it often isn’t really and with perfect information this would be more obvious.”

    Lok you babbling lying idiot, business is frought with risk, which is why nearly all CEO’s never see life past 3/4 years in the job.

    “They’re hard to face, especially when you’ve invested emotionally in a notion that it does not happen. I apologise if I’ve hurt your feelings Mark, but you must understand that imperfect information flows will give rise to regulation. Jason has said that one does not automatically invite the other, and this is fair, but it is foolish to deny the linkage”

    The only thing hard to face is having to endure your oppressive stupidity post by post. The only linkage I won’t deny is that you are a knowthing ignoramous and ABL is wasting too much time with you.

    JC.

    December 18, 2006 at 6:08 pm

  65. “Put simply, there’s a difference between what happens in theory and what happens in practice. If the devil is in the detail, then the impetus for effective regulation lies within that difference.”

    Precisely. So why are you begging for more regulation when regulation causes many of the problems you speak of, such as barriers to entry causing the creation of market power?

    “I said that regulation is necessary and that an absence of regulation would not actually lead to a truly free market.”

    You simply deny free markets existence by definition. This doesn’t prove anything. Your reason why they are not “free” is because they do not act like perfect markets, which cannot exist. I do not know why you are talking about ‘teh real world’ when your premise is utterly fantastic.

    “Efficient from one individual’s point of view, but in a general, “long term”, market-wide perspective, it’s sheer piracy. Had Rivkin told the market about the information he’d received that materially affected Qantas’ share price, he’d deserve your defence.”

    I’m sorry you don’t understand welfare economics or portfolio theory. I’m sorry I can’t relate to your emotive arguments either.

    “You haven’t looked into the issue so you can’t make that call. I could explain it to you, but this would give rise to shrieking that I’m placing a pebble in the shoe of great forward strides of humanity. Your “reductions in transaction costs” are, in the context of plundering market inefficiency, someone else’s pitching below cost.”

    Thanks. Now I know I don’t know anything about firms and transaction costs. But you still haven’t explained how this isn’t a more efficient outcome. You’ve simply flung woo at the Bolsheviks.

    “You have no idea what my purchasing decisions are.”

    If you can find a supermarket which has none of the attributes, please tell me, I want to buy my potatoes by the tonne (real world huh?). Market power is not selling a good with many attributes by using a low value input from producers who are too numerous and inefficient.

    As for your platitudes…your examples are trivial and fall apart on further investigation.

    Mark Hill

    December 18, 2006 at 6:57 pm

  66. ABL

    Don’t get me wrong, you’re stuff is a great read and truly worthy of a Phd student.

    I cenrtianly hope,you’re writing this stuff for our benefit, keep it going because you stuff is just great. However if you’re doing it solely for andy’s benefit, don’t wast your time.

    Numbnuts is so far gone , he’s almost dangerous. He needs close support and adult supervision at all times when he is on a computer.

    Its about the only example of market failure i have evern witnessed. Andy is not getting enough adult attention and supervision.

    JC.

    December 18, 2006 at 8:04 pm

  67. “Put simply, there’s a difference between what happens in theory and what happens in practice. If the devil is in the detail, then the impetus for effective regulation lies within that difference.”

    Andrew. Can you just start again and this time make a fucking sound argument.

    Before you were relying on the completely dubious theory of perfect competition.

    Now you’re trying on the opposite line.

    But you seem to have lost your way and are jabbering with only the goal of proving that bully-boy-silly-buggery is absolutely necessary.

    What exactly is your argument?

    GMB

    December 18, 2006 at 8:13 pm

  68. GB

    His argumment is that a Pinochet led coup will lead Coles and Fosters to lose their market dominance in an ever changing market that desires redicalism along with effective regulation….along the lines that we have in the stockmarkets. Andrew can then say that we are close to the theory of perfect competition

    This is not all together a bad thing because he says:

    “there’s a difference between what happens in theory and what happens in practice. If the devil is in the detail, then the impetus for effective regulation lies within that difference.”

    A truer more complete line of reasoning has rarely been seen. Andy is a natural.

    JC.

    December 18, 2006 at 8:22 pm

  69. Could someone tell me when the ASX insisted “that brokers must intervene between buyers and sellers.”

    Any bird brain can buy and sell shares on the ASX via a licensed operator who uses the Click-XT system (like a bank – Commsec and Etrade), there is no requirement for a third party in the transaction only for a facilitator as transactions are made directly between investors.

    Its not like you are borrowing money off the bank who holds money deposited by others, on the ASX you make a bid to buy/sell and the market responds directly to your bid.

    Its more like using a machine to buy a train ticket.

    People choose to use brokers primarily for advice particularly for advice on when to buy and sell.

    What was the other point?

    rog

    December 18, 2006 at 9:10 pm

  70. “your attempt to link Osama bin Laden and Kevin Rudd was no more intellectually robust than anything else you do.”

    Did you do that JC? – you are in fine company indeed

    http://johnquiggin.com/index.php/archives/2006/12/13/blair-concedes-defeat/#comment-104348

    rog

    December 18, 2006 at 9:18 pm

  71. Rog asks:

    “Did you do that JC? – you are in fine company indeed”

    No, Rog. I have never linked Rudd to OBL. It’s the sort of silly comment the lunatic would say to cause problem. The nasty little prick is lying again. It’s just an outrageious comment meant to be malicious.

    On the other hand the little squib did refer to Sydney teenagers as “cheeky” for wearing “I love
    OBL T-shirts”.

    That’s why he’s trying to get me back in some way.

    JC.

    December 18, 2006 at 10:27 pm

  72. umm no spell check
    outrageous

    JC.

    December 18, 2006 at 10:43 pm

  73. The Libertarian Party: “worse than a waste of time“?

    C.L.

    December 20, 2006 at 11:10 am

  74. Iraq Surrender Group:

    GMB

    December 20, 2006 at 9:11 pm

  75. CL: “The Libertarian Party: “worse than a waste of time“?”

    This may be correct in the US. But not in Australia with its preferential voting (and proportional system in the Senate).

    Boris

    December 20, 2006 at 10:04 pm

  76. Not my sentiments, Boris – just posting a link with a quote from the article. 😉

    C.L.

    December 20, 2006 at 10:08 pm

  77. CL I did not say they were yours.

    Boris

    December 20, 2006 at 10:16 pm

  78. Whatever.

    C.L.

    December 20, 2006 at 10:28 pm

  79. Interesting: The Blog Mob.

    C.L.

    December 21, 2006 at 12:24 am


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