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ontheway
Joined: 24 Aug 2005
Location: Somewhere under the rainbow...
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 Posted: Thu Nov 12, 2009 9:12 am Post subject: |
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| No. Economies of scale exist because of physical restrictions to competition. |
Now there is a sentence that has no meaning in the English language. |
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Rum Jungle
Joined: 18 Nov 2005
Location: North Asia
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| Posted: Thu Nov 12, 2009 9:17 am Post subject: |
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Predicting the end of oil supply by economist/pundits...Is it not like global warming?
Mauritius/the Maldives isn't going to sink beneath the waves in 5 years time as the alarmists thought would happen.
And neither will oil. |
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RufusW
Joined: 14 Jun 2008
Location: Busan
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| Posted: Thu Nov 12, 2009 9:17 am Post subject: |
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I don't know what you're admitting ontheway..... a failure to understand economics or a failure to understand the English language.
Economies of scale exist because of physical restrictions.... i.e. it's easier for a single company to set up a telephone network.
I am literally amazed you don't understand this, and honestly, I can't take you seriously because I know you haven't studied economics and you haven't/can't grasp the basics. I mean really....I'm sorry. |
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Pluto
Joined: 19 Dec 2006
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| Posted: Thu Nov 12, 2009 9:36 am Post subject: |
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| RufusW wrote: |
| Pluto wrote: |
| Economies of scale exist due to the firm's learning curve |
No. Economies of scale exist because of physical restrictions to competition. |
Yes I was paraphrasing. The larger point is that you're confusing economies of scale and monopoly theory. The two are completely unrelated. |
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ontheway
Joined: 24 Aug 2005
Location: Somewhere under the rainbow...
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| Posted: Thu Nov 12, 2009 9:38 am Post subject: |
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| RufusW wrote: |
I don't know what you're admitting ontheway..... a failure to understand economics or a failure to understand the English language.
Economies of scale exist because of physical restrictions.... i.e. it's easier for a single company to set up a telephone network.
I am literally amazed you don't understand this, and honestly, I can't take you seriously because I know you haven't studied economics and you haven't/can't grasp the basics. I mean really....I'm sorry. |
You said, "... physical restrictions to competition."
Would that be like, attaching 1000 pound balls to the legs of a racehorse so it couldn't run?
And what your trying to say about telephone companies actually shows that you are confusing two things that have two different hypothetical explanations.
The one: "economies of scale" has been proven and is an establish part of economic theory. Essentially, firms get more efficient as they get bigger, for a while, because they benefit from certain efficiencies that come from many places including the laws of physics, of course, but also human talent, finance and other factors. There is a point at which peak efficiency is reached, afterwhich, diseconomies of scale set in and the firm will earn lower ROI by getting bigger. Normally growth will stop at this point. There are socialist effects that have caused the marketplace to be greatly distorted. One important one is the Income Tax which makes it more profitable to retain earnings instead of paying dividends even though the firm is no longer efficient because the after tax ROI of the inefficient firm is superior than the after tax ROI earned by paying higher taxes on dividends and reinvesting. A distortion created increase in ROI can cause inefficiency to dominate, which is how we have gotten so many large "too big to fail" dinosaur companies, which are really "to big to exist."
The other: "natural monopoly" was created by PR men and has been disproven both empirically and theoretically and is not a part of economic theory any longer. Telephone and electric companies created it, spun it up, and got themselves monopolies that have caused huge generational damage to the economy. A few suckers bought the PR campaign, and unfortuately, such nonsense is still parroted by the ignorant. They should not be allowed to teach. |
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RufusW
Joined: 14 Jun 2008
Location: Busan
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| Posted: Thu Nov 12, 2009 10:01 am Post subject: |
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| ontheway wrote: |
| "natural monopoly" was created by PR men and has been disproven both empirically and theoretically |
Yes please, source to disprove what I've been taught.
Do you think national defence/pollution are natural monopolies? |
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Rum Jungle
Joined: 18 Nov 2005
Location: North Asia
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| Posted: Fri Nov 13, 2009 10:37 am Post subject: |
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| RufusW wrote: |
| ontheway wrote: |
| "natural monopoly" was created by PR men and has been disproven both empirically and theoretically |
Yes please, source to disprove what I've been taught.
Do you think national defence/pollution are natural monopolies? |
Not sure about pollution/global warming. But natural monopolies, companies too big to fail, the Korean chaebols like Hyundae etc?
"We make things"...as Angela Merkel told Tony Blair about the difference between the German and UK economies.
There's a Nobel Prize in Economics there for the taking if an economist can put forward a model. De-industrialisation in UK,US v Service sector economy. |
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RufusW
Joined: 14 Jun 2008
Location: Busan
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| Posted: Fri Nov 13, 2009 11:08 am Post subject: |
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| Pluto wrote: |
| The larger point is that you're confusing economies of scale and monopoly theory. The two are completely unrelated. |
They are exactly related. |
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RufusW
Joined: 14 Jun 2008
Location: Busan
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| Posted: Fri Nov 13, 2009 11:13 am Post subject: |
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| ontheway wrote: |
| "natural monopoly" was created by PR men and has been disproven both empirically and theoretically [O'really?]and is not a part of economic theory any longer [O'really?]. Telephone and electric companies created it, spun it up, and got themselves monopolies that have caused huge generational damage to the economy. A few suckers bought the PR campaign, and unfortuately, such nonsense is still parroted by the ignorant [Hmm...]. They should not be allowed to teach. |
Ha Ha. Monopolies exist because of the cost of entry into the market. TV, telephone, internet are all prime examples. |
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OneWayTraffic
Joined: 14 Mar 2005
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| Posted: Fri Nov 13, 2009 4:21 pm Post subject: |
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| Rum Jungle wrote: |
Predicting the end of oil supply by economist/pundits...Is it not like global warming?
Mauritius/the Maldives isn't going to sink beneath the waves in 5 years time as the alarmists thought would happen.
And neither will oil. |
It's a finite supply, and when it's gone it's gone. Along with this, most new oil to be found will be by definition harder to find; extract and deliver than currently existing oil.
On the flip side, classical economics would predict that as it gets more expensive we will use less of it, and look for alternatives. This is happening now, but the economy is still tremendously vulnerable to oil shortages.
It's basically going to be a race between supply, demand and technology, with our civilisation in the balance. |
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Fox
Joined: 04 Mar 2009
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| Posted: Fri Nov 13, 2009 7:35 pm Post subject: |
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| OneWayTraffic wrote: |
| On the flip side, classical economics would predict that as it gets more expensive we will use less of it, and look for alternatives. This is happening now, but the economy is still tremendously vulnerable to oil shortages. |
Of course, rather than waiting until inevitable shortages manifest symptoms which will cause people to suffer, we could simply begin implementation of an alternative energy economy now. Unfortunately, that would be Socialist! We must wait until there are rampant shortages and people are suffering to do anything about it, that's what Liberty is about. |
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bacasper
Joined: 26 Mar 2007
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| Posted: Fri Nov 13, 2009 9:21 pm Post subject: |
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| Fox wrote: |
| Of course, rather than waiting until inevitable shortages manifest symptoms which will cause people to suffer, we could simply begin implementation of an alternative energy economy now. Unfortunately, that would be Socialist! We must wait until there are rampant shortages and people are suffering to do anything about it, that's what Liberty is about. |
You got it backwards: without the socialists, the investment would have occurred long ago. |
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Fox
Joined: 04 Mar 2009
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| Posted: Fri Nov 13, 2009 9:36 pm Post subject: |
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| bacasper wrote: |
| Fox wrote: |
| Of course, rather than waiting until inevitable shortages manifest symptoms which will cause people to suffer, we could simply begin implementation of an alternative energy economy now. Unfortunately, that would be Socialist! We must wait until there are rampant shortages and people are suffering to do anything about it, that's what Liberty is about. |
You got it backwards: without the socialists, the investment would have occurred long ago. |
Yeah, this data-free counterfactual is a favorite of Libertarians. |
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bacasper
Joined: 26 Mar 2007
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| Posted: Fri Nov 13, 2009 10:15 pm Post subject: |
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| Fox wrote: |
| bacasper wrote: |
| Fox wrote: |
| Of course, rather than waiting until inevitable shortages manifest symptoms which will cause people to suffer, we could simply begin implementation of an alternative energy economy now. Unfortunately, that would be Socialist! We must wait until there are rampant shortages and people are suffering to do anything about it, that's what Liberty is about. |
You got it backwards: without the socialists, the investment would have occurred long ago. |
Yeah, this data-free counterfactual is a favorite of Libertarians. |
Just how is one supposed to provide facts for what would have been?
Got any facts to show it is not true? |
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Koveras
Joined: 09 Oct 2008
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| Posted: Fri Nov 13, 2009 10:34 pm Post subject: |
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| I don't think it's true that a free market economy couldn't plan ahead. On the contrary, the research I've seen suggests that in freer markets people have a lower time preference, meaning they weigh future well-being more heavily in their choices. |
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