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To: Alberta's Child
You keep harping on market inefficiency as though it means someone has to get the shaft, not of their own laziness or willful incompetence. If the market consisted of me and you, and I made the things that you needed and vice versa that wouldn't be so. Just take that and expand that to a nation.
157 posted on 02/13/2004 10:08:51 PM PST by drlevy88
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To: drlevy88
You keep harping on market inefficiency as though it means someone has to get the shaft . . .

That's not the point at all. When I describe an "inefficiency" I'm talking about an "abnormal" situation in which an imbalance exists between supply and demand (for any number of reasons) that allows a business or individual to prosper for a period of time -- and by "prosper" I simply mean that they are able to get a "better than average" return on their input.

If the market consisted of me and you, and I made the things that you needed and vice versa that wouldn't be so.

For the market that you described, we are both right. If you grow lettuce and I bake bread, then there won't be any "inefficiency" in the market based on how I defined it. If we each eat a loaf of bread every week, and we both eat a head of lettuce every week, then you will grow 104 heads of lettuce every year and I will bake two loaves of bread every week. And half of your lettuce will be traded to me for half of my bread.

An "inefficiency" (actually, the term "imbalance" is probably more accurate) in this simple market could be something as simple as an eating binge on my part, in which I suddenly have a desire to eat both of my loaves of bread one week. Despite the fact that you did nothing to deserve it, you will suddenly find yourself with two heads of lettuce when you only have a need for one of them. There's no right or wrong here -- that's just the way it is.

165 posted on 02/13/2004 10:26:33 PM PST by Alberta's Child (Alberta -- the TRUE North strong and free.)
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