Posts

The limits of the model of perfect competition

"The model cannot be used to 'explain' market prices; the model presumes that everyone has, somehow, correctly and self-fulfilling guessed what the market price is going to be. The circumstance that (quite apart from the assumed correctness of the anticipated price) the model treats each market participant as a price-taker further underscores the uselessness of the model as an explanation for the manner in which prices are adjusted. No one in the model ever does change his price bids or offers." -- Israel Kirzner, Competition, Economic Planning, and the Knowledge Problem, p. 52

As Bob Murphy once  told me once, in the model of perfect competition, it is as though the local grocer wakes up in the morning and is suddenly surprised to find that he is now offering milk at a new price.

Didn't he realize that *he* was a carbon-based fuel source?

Image

I've got you surrounded!

Image
For a moment, let us suppose that some form of religious universalism is true, e.g., "All major religions are different paths up the same mountain."

Nevertheless, the way most people act, among those who accept this thesis, still makes no sense if one wishes to reach the peak: even if many paths lead up a mountain, one must still pick one of them, and follow it, to get to the top!

What most "universalists" do instead is to wander around and around at the foot of the mountain, sampling each path for a couple of hundred feet, and then heading back down to the flatlands.

Bucket Lists

What a sad sack of an idea: in a life defined by consumption as the highest good, people can think of nothing better to do with their last few months than a spectacular bout of consumption!

Coming around, coming in circles

I'm now reviewing Israel Kirzner's Competition, Economic Planning, and the Knowledge Problem for Review of Political Economy. So naturally I'll be posting some thoughts here as I proceed. Here's the first quote I will note:

"Now Mises himself never did focus explicitly on plan-coordination in all of his work; he never did focus on the dispersed character of knowledge, and on the consequent coordination problem. (this does not mean that Mises' seminal insights [on the business cycle and the socialist calculation problem] cannot be faithfully articulated in plan-coordination terms; it merely means that Mises himself never explicitly recognized this possible articulation" ("Hedgehog or Fox," p. 145).

Mises explained to us the calculation problem; Hayek showed us why the problem exists. The whole "dehomogenization" nonsense is purely a marketing driven effort made to differentiate that "hardcore" libertarians at the Mises Instit…

The one true church

I was at my church today helping out with the Easter decorating. I took a bag of garbage out of the trashcan, and asked one of the more experienced volunteers, “Where should I put this?”
She replied, “Just put it out on the steps: Mohammed takes care of the garbage.”
This was a startling idea to me. I am now imagining that Buddha does the dishes after church suppers, and Zoroaster takes care of the laundry.

Google’s phony feminism

Google fired engineer James Dalmore because he suggested that perhaps, on average, women are more people-oriented and less gadget-oriented than men are.
This week, top Google executives are meeting with the Saudi crown prince, who imprisons businessmen who criticize his rule and presides over a regime in which women are not allowed to drive cars, to discuss what sort of business deals they can strike with him.
If Dalmore had just had a couple of hundred billion dollars to invest, he probably could have imprisoned women who were trying to program and gotten away with it, as far as the Google executives are concerned.