Relay-Version: version B 2.10 5/3/83; site utzoo.UUCP Posting-Version: version B 2.10.2 9/5/84; site unmvax.UUCP Path: utzoo!watmath!clyde!burl!ulysses!mhuxr!ihnp4!houxm!whuxlm!harpo!decvax!genrad!teddy!panda!talcott!harvard!seismo!cmcl2!lanl!unmvax!cliff From: cliff@unmvax.UUCP Newsgroups: net.politics Subject: Re: Re: Inflation in a Free Economy? (Nota bene, Baba!) Message-ID: <602@unmvax.UUCP> Date: Thu, 24-Jan-85 16:20:27 EST Article-I.D.: unmvax.602 Posted: Thu Jan 24 16:20:27 1985 Date-Received: Tue, 29-Jan-85 06:02:59 EST References: <756@ratex.UUCP> <443@whuxl.UUCP> Distribution: net Organization: Univ. of New Mexico, Albuquerque Lines: 111 > It is hardly new to claim that in the theoretically perfect conditions of > a totally free market, that all would be wonderful. So the question is > 1)how come it's not? Let's stick to one thing at a time, inflation. Find someone with a Federal Reserve Note (i.e. One Dollar Bill, Fiver, etc.). Examine it closely. Notice the words "This note is legal tender for all debts, public and private", examine the bill closely for the promise that the bill can be redeemed for some portion of the reserve on which it is based. Unless your bill is a collector's item you will not find such a promise. It is still a "Federal Reserve Note", but there is no reserve of gold or silver with which to back it up. Isn't it curious that all our significant battles with inflation have taken place in the short time since we got off the gold standard? > 2)how does Mr. Mc Kiernan intend to achieve a totally free market economy, > one with no distortions of industrial monopoly power, local monopoly > power, etc.? "Industrial monopoly power" does not affect inflation. Please name one time in the U.S.'s history that a industrial monopoly power induced inflation. Could it be when Alcoa Aluminum was prosecuted under the Sherman Anti-Trust act because it was "unfairly" using the latest technology to keep its costs and hence prices below those that the smaller companies were used to? > 3)is such a condition consistent with the current large concentrations of > wealth in the hands of a few? For example, earlier I pointed out that > economists who study development have concluded that a successful > agricultural system is more likely with many small independent farmers. I guess that blows Socialists away...when the state owns your farm you are no longer independent. Of course it is consistent with the current large concentration of wealth in the hands of the few... you explain it reasonably beloow > This of course promotes the underlying conditions which are necessary for > free market efficiency (many small producers, no one of which can > greatly affect either price or supply) > But then how does one bring this condition about in a country like > Nicaragua under Somoza in which one family owns 70% of the land? > Does one hold property rights absolutely inviolate or does one > redistribute such economic control? It depends on how the family came to own 70% of the land. If it was through the auspices of a non libertarian government then when that government topples and a libertarian one is put in place it would be quite consistent to redistribute the land. > Could persistent inflation and unemployment have anything to do with > the fact that our current economy is dominated by relatively few > oligopolistic corporations? No. Inflation is caused by the Federal Reserve system. Unemployment is caused by minimum wage laws. Please tell me why we need welfare and minimum wage laws. So we can prevent people who have been failed by public education from getting their feet in the door to a way out of poverty? > Under conditions of oligopoly the assumption > that prices are related to "true" value (whatever that is anyway?????) > is no longer valid. Unless there are laws preventing new corporations from joining the field the "true" prices will continue. As soon as the ooligopoly uses its might to skim off an unreasonable profit another company will rise up to undercut the first. > The government did nothing to make sure that there > were only 4 major auto companies in the US. Bullshit! The U.S. government has said quite explicitly by its actions that it will make sure that these 4 companies receive special privileges including but not limited to special loans not available to startup companies and pro- tection from foreign competitors. One of the easiest ways to make cars cheaper is to build them in Japan where common sense still prevails. The government then forces import quotas on them. You sure picked a poor example. By the way, did you ever think that there are other things that compete with cars for the transportation money? Do you know what the U.S. gov did to the people who prefer to motorcycles. They made every company except Harley Davidson pay a tariff. > They accomplish such > market control all by themselves. How did that happen? And why? > Such conditions in which 3 or 4 firms control a majority of the market is > true in many industries in the US. And the number controlled in this > way grows every day. Another way in which the government sees that startup companies will be at a severe disadvantage is through all the regulation that it requires. The companies that are in place have sufficient funds to lobby a sufficiently powerful set of regulators so that new rules and regs will impact the big four less significantly then they would a start up company. > I praise Mr. Mc Kiernan's lucid exposition of monetarism and laissez faire. > However, this is the real world in which oligopoly power grows daily.... Horrors! Oligopoly power. I bet nobody would even consider starting up a company that might compete with IBM. Let's see a list of the areas where oligopoly power controls the market. Try to be general, like transportation, rather than specific like, cars that are made in the U.S.A. I think you will be pretty hard presssed to come up with one much less a number requiring two hands to count it on. > tim sevener whuxl!orb --Cliff [Matthews] {purdue, cmcl2, ihnp4}!lanl!unmvax!cliff {csu-cs, pur-ee, convex, gatech, ucbvax}!unmvax!cliff 4744 Trumbull S.E. - Albuquerque NM 87108 - (505) 265-9143