tag:blogger.com,1999:blog-6245381193993153721.post7147560204937677077..comments2024-03-17T00:23:24.896-07:00Comments on Social Democracy for the 21st Century: A Realist Alternative to the Modern Left: Reality versus Rothbard: Prices, Demand and Production in the Real WorldLord Keyneshttp://www.blogger.com/profile/06556863604205200159noreply@blogger.comBlogger8125tag:blogger.com,1999:blog-6245381193993153721.post-81243535863694007882014-05-29T13:03:11.814-07:002014-05-29T13:03:11.814-07:00Why do you assume that the results of the survey -...Why do you assume that the results of the survey -- that **most** firms do what is said -- must mean that ALL firms in human history do what is said?<br /><br />If you cannot distinguish between (1) a statement reporting what is **generally** done (with a minority of exceptions) and (2) what is universally done (with no exceptions), then you are clearly wasting my time, hank.<br />Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-89640136850091263902014-05-29T12:56:51.043-07:002014-05-29T12:56:51.043-07:00"The empirical evidence overwhelmingly confir..."The empirical evidence overwhelmingly confirms this. In a recent survey of 654 UK businesses, the firms were asked: what do you do when there is a boom in demand which cannot be met from stocks or inventories? Most UK firms said they simply increase overtime of workers"<br /><br />What if there is a scenario in which it is not possible to increase overtime workers, where the firm does not have enough resources to do so?<br /><br />Why do you ignore this basic scenario? Hanknoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-49664542812109140552014-05-28T11:38:30.712-07:002014-05-28T11:38:30.712-07:00"What if businesses have stretched overtime, ..."What if businesses have stretched overtime, and hiring of new workers to the limit, and their inventories keep emptying repeatedly day after day. You are telling me they wouldn't raise prices? Please! "<br /><br />You just implied that price inflation might arise once<br />there's constantly demand in excess of maximum capacity.<br />Well duh?Whoever denied that?<br />Crossovernoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-35177031704767064062014-05-27T22:37:21.876-07:002014-05-27T22:37:21.876-07:00"What if businesses have stretched overtime, ...<i>"What if businesses have stretched overtime, and hiring of new workers to the limit, and their inventories keep emptying repeatedly day after day."</i><br /><br />Engineers build factories to have significant excess capacity, edward. They do not normally face such situations.<br /><br />And even when they do, they can build a new factory. Evidently this possibility did not enter your empty head.<br /><br /><i>"A business facing a drop in demand might layoff workers, reduce hours but if inventory stays on the shelf for long periods of time, the business will in desperation turn to cutting prices."</i><br /><br />In exceptional situations, that may happen. But this does not change the fact that in many mark-up price markets, it does not normally happen.<br /><br />Relative price inflexibility is a pervasive feature of the developed world economies, owing to 3 reasons: <br /><br />(1) mark-up pricing is a strong source of price rigidity, <br /><br />(2) so are explicit nominal contracts, and <br /><br />(3) so are “implicit” contracts — the feeling of many business people that they should keep prices reasonably stable for their customers, instead of adjusting them repeatedly when demand changes.Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-12638302199868282422014-05-27T22:31:13.925-07:002014-05-27T22:31:13.925-07:00(1) I already made exceptions for certain goods (&...(1) I already made exceptions for certain goods ("especially in second hand goods stores or where retail businesses try and match their competitors’ prices"). Perhaps you didn't read it properly, edward?<br /><br />(2) nah, edward, you've got over 21 independent well-sampled surveys in over 21 different nations over 25 years in which thousands of business people say virtually the same thing regarding pricing practices.<br /><br />If you think they were lying, then either <br /><br />(1) by some miracle the business people all independently manage to get their story straight when they lie and keep their lies consistent over many years. (If people were all independently lying you would of course expect there to be serious inconsistencies in the story they tell: but, no, there is a long consistency), or<br /><br />(2) it is all some massive conspiracy theory.<br />-------------------<br />Either way your nonsense is damned: what you're are positing is either a miracle or a tinfoil hat conspiracy theory.Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-34784007420643649702014-05-27T16:07:37.247-07:002014-05-27T16:07:37.247-07:00I think I get it: Rothbard is not describing the a...I think I get it: Rothbard is not describing the actual economic world. He's describing an ideal world, in which things would balance out nicely as long as everyone played according to the rules. He's performing an act of rhetoric and persuasion disguised as an empirical and scientistic description of the actual world such as it exists at time t.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-16216793601703570412014-05-27T14:29:46.457-07:002014-05-27T14:29:46.457-07:00What if businesses have stretched overtime, and hi...What if businesses have stretched overtime, and hiring of new workers to the limit, and their inventories keep emptying repeatedly day after day. You are telling me they wouldn't raise prices? Please!<br /><br />The opposite holds true as well. A business facing a drop in demand might layoff workers, reduce hours but if inventory stays on the shelf for long periods of time, the business will in desperation turn to cutting prices.<br /><br />The fact that there are no DIRECT buyers auctions in "fix"price markets. doesn't change the truth. Subjective value determines price in the long runEdwardnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-29065115037527509032014-05-27T14:22:51.562-07:002014-05-27T14:22:51.562-07:00"Try walking into any number of supermarkets ..."Try walking into any number of supermarkets or department stores that sell newly-produced goods, and attempting to haggle with the staff to bring the price of goods down. "<br /><br /><br />Eh, in some cultures this is the norm.<br />Ever been to the middle east?<br /><br />Also I don't know the process of buying a car in the UK, but we haggle with the car salesman in America.<br /><br />Also a reason why that survey in the UK is suspect is because business owners might not want to be seen to do something "socially undesirable" like raising prices. A good way to investigate empirically is not to take peoples word for it when their answer might be suspect, but to investigate by sending independent observers to look at business books and to check with customers.<br /><br />THAT was what Milton Friedman meant when he said you have to take the answers to surveys of businesspeople with a grain of salt. NOT that empiricism was invalid like the Austrians, (after all Friedman was a statistician) bu that you have to double check.Edwardnoreply@blogger.com