Harry Pollard wrote:
>
> Brad,
>
> A bit late coming to your question about 'what is political economy' - but
> there you are.
[snip]
>
> As a trade is to the benefit of both traders, it seems to follow that one
> hundred trades or a thousand trades will result in general benefit of
> everyone in the market place.
>
> Seems pretty reasonable doesn't it?
Yes, if all the traders are free to walk away from the
transaction without suffering any consequences
which they perceive as seriously unwelcome.
>
> So when you say 'let an invisible hand decide the allocation of resources
> in their social world' you are really saying that people decide for
> themselves. That's OK too, isn't it?
Yes, provided the "hand" stops all forms of intimidation.
>
> The Science of Political Economy is the study of the Nature, Production,
> and the Distribution of Wealth.
That's what I had hoped it would be.
>
> However, I recall distantly that a meaning of political is "social" and a
> meaning of economy is "organization". It could be called the Science of
> Social Organization.
That sounds even better to me.
>
> In any event, it doesn't begin until the first arms-length exchange - which
> removes from the study a person picking an apple and eating it. A useful
> tool in any study is the removal of underbrush to make the trail easier to
> follow. So, we can cut the unnecessaries.
"Political economy" AKA social organization, is then, the study
of human "behavior" mediated through other persons. The man
who takes the apple from the tree and eats it, providing the
tree is not "anybody's property", has not engaged in
a politico-economic act unless his eating said apple impinges
on someone else's life (e.g., while he eats the apple
he watches a sleeping fellow human be silently attacked
by a wild animal from which he could have saved the
person by yelling: "Heads up!" instead of uninterruptedly
munching and spectating).
>
> As this is the science of "production" we can continue the elision by
> removing Wealth from the study as Wealth is the product in the hands of the
> consumer - that is after production is finished. We are interested in where
> it comes from and where it goes,
>
> We can also remove service givers from the study as they do not directly
> contribute to production. (The factory doctor is part of production as he
> works on those who produce, but the local locum we can conveniently leave
> from the study.)
This begins to sound like an unsound "abstraction". "You know" --
who is a direct producer and who isn't? If the workers are
as "highly tuned" as star athletes, then they will not
produce to norm without the doctor. Often the doctor will
*increase* production more than what he costs.
>
> We can bring all the elided back after we've established how things get
> from the earth into the consumer's hands.
>
> A point about the "invisible hand". The concept is a good one. If 100
> people come to market and trade, they will all be better off afterwards
> than they were before. Trade is a win-win situation. Neither trader will
> trade unless he's better off afterwards. Once they have all traded in their
> own self interest, the community will be better off as if made so by an
> invisible hand.
Again, only if they are all presupposed to be in the condition of:
"And Judah and Israel dwelt safely, every man under his vine
and under his fig tree, from Dan even to
Beersheba, all the days of Solomon." (1 Kings 4:25)
Of course persons can mutually benefit under other conditions,
like -- I believe it was your quote about the frog and the scorpion
crossing the river?
>
> Trade is a multiplier of well-being. That's why people do it when they are
> allowed.
Hummh.... I would rather be freed from having to engage in
enterprise rather than having freedom of enterprise. Unless
you are referring to "trading" ideas in leisured discourse?
A. "You know, Sam, I have an extra Bentley I don't need sitting
in the garage and costing me a mechanic and insurance." "Gee,
Fred, funny you mention that, because I really would like
a Bentley, but I'm stuck with this extra Patek Philippe
minute repeater watch that's costing me insurance and
a watchmaker." "Sam? How did you guess that that's exactly
what I wished I had instead of that 'fifth wheel'?" [They
shake hands and live happier ever after.]
B. "Look Mary, I've got a watch and no fob." "Gee Joseph, I've
got hair and no comb." (--O'Henry redux)
C. "Look Harry, I've got a factory and no workers to run the machines."
"Gee, Henry, I'vbe got labor power but no means of production."
"Minimum wage, Harry!" "Done deal, Henry [thinks to self: 'I really
didn't want to starve in the street.']"
D. "Agreements made under duress are void." (Communist official to
demoralized news reporter at end of Andrzej Wajda's film about the
Gdansk shipyard strike, _Man of Iron_)
>
> As I've often said, this is the price mechanism controlled free market. The
> "price mechanism" merely refers to the engine that maintains the
> relationship between producers and consumers. When the price increases,
> consumers buy less, but producers produce more. Goods flood the market,
> bringing the price down. When the price drops consumers buy more, but
> producers are less willing to produce, so a shortage develops which raises
> the price. It's like a house thermostat keeping the temperature constant.
But, in all seriousness, Harry, even if the market will eventually
find the optimum, is the life span of individual human mortals
always, or even in general, long enough to wait -- and to not
be crippled by the wait, either?
>
> In both cases, the price/temperature hunts around a point - an equilibrium.
> In Political Economy I would call this equilibrium the 'market clearing
> price' - but that term has rather gone out of fashion in modern economics.
Can't supercomputers figure this out today, without real
humans actually "running the numbers" in their life times?
>
> The free market is not a creature of government, nor corporations, but of
> people - acting in their own interests. The free market is anti-privilege
> and when those in power want to benefit at the expense of the people, they
> re-arrange trade to benefit themselves by legislation - which is of course
> privilege.
Can't the winner du jour convert his "local"
advantage into global and long-term advantage by
such competitive means as economies of scale?
In other words, isn't the market self-destroying, at least
under conditions of advanced technology as opposed to the
"steady state" of medieval society (Muslim "bazaars", peasant
farmers' markets, etc.)?
>
> However, the price mechanism simply hunts around such a new position, even
> though it disadvantages people. This is not the fault of the market price
> mechanism, but a consequence of interference with the market.
Like economies of scale?
>
> A major problem with a market economy is that land is not controlled by the
> price mechanism. In fact, the land market is similar to the collectible
> market. You might note that the stock market exhibits similar
> characteristics. The stock market is called a "bubble". No-one seems
> willing to dare to describe the present land market as a bubble.
Different topic, I think. And here I may at least in part
agree with you, but this email is already too long....
I agree with a Conference Board article I read ca. 1980 where
they likened Americans "investing" in home ownership to
people buying gold bullion -- totally non-productive.
[snip]
Yours in the universal marketplace ["Jeder fur sich, und Gott
gegen Alle" -- ref. Werner Herzog]....
\brad mccormick
--
Let your light so shine before men,
that they may see your good works.... (Matt 5:16)
Prove all things; hold fast that which is good. (1 Thes 5:21)
<![%THINK;[SGML+APL]]> Brad McCormick, Ed.D. / [EMAIL PROTECTED]
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