RE: Re: Re: RE: Farm subsidy data base
That's a useful distinction, but I would say it is the commodity sector that 'works' as far as markets go, and the other one that doesn't. The stability of the intellectual-prop sector preserves its inefficiency and unfairness. Market functionality travels over the dead bodies of failed suppliers. -- mbs Gene, I have been pushing the idea that the economy breaks into two different sectors. 1 consists of the undifferentiated commodities, and the other, those sectors protected by intellectual property rights. The former will remain in trouble while the latter will prosper as long as it is backed by state power. But then, you will have to wait until my book comes out in a few months On Thu, Dec 27, 2001 at 09:47:31AM -0800, Eugene Coyle wrote: My argument is that selling an undifferentiated commodity on the market -- like many farm commodities -- actually results in prices that only cover marginal costs, not average costs. The difference has to be made up somehow. That is what I see as the idea behind farm subsidies. -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail [EMAIL PROTECTED]
Re: Re: Re: RE: Farm subsidy data base
I'm looking forward to your book. Gene Michael Perelman wrote: Gene, I have been pushing the idea that the economy breaks into two different sectors. 1 consists of the undifferentiated commodities, and the other, those sectors protected by intellectual property rights. The former will remain in trouble while the latter will prosper as long as it is backed by state power. But then, you will have to wait until my book comes out in a few months On Thu, Dec 27, 2001 at 09:47:31AM -0800, Eugene Coyle wrote: My argument is that selling an undifferentiated commodity on the market -- like many farm commodities -- actually results in prices that only cover marginal costs, not average costs. The difference has to be made up somehow. That is what I see as the idea behind farm subsidies. -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail [EMAIL PROTECTED]
Re: RE: Re: Re: RE: Farm subsidy data base
Some queries and remarks: 1) What does 'works' mean. Farm commodities are not sold as free market commodities since they are subsidized. THe only sense I can see to works here is that consumers pay low prices. But in market theological terms arent they artificiallly low? 2) Why is the sector involving intellectually protected sector differentiated? When the protection runs out are the commodities undifferentiated as the now competing types of glysophate? They are differentiated only because they are protected not qua product. Related to this matter 3) Many commodities not protected by intellectual property rights seem differentiated. For example there is feed and malting barley and different varieties of each not counting hybrids. In the case of grains there is always price differentiation in terms of grade. In crops such as apples they are surely not sold just as apples but as this or that type and quality. But perhaps you are using undifferentiated in a technical way I do not understand. 4) But political reality makes it impossible to achieve market functionality over the dead bodies of producers. There is a tradeoff. The system works only because market functionality is sacrificed to saving some who would die if the market were truly functional. Isnt this so? 5) Intellectual property rights backed by state power does not necessarily bring success. A good example is GM flax. A patent was issued to a U of Sask prof. who gained nothing except notoriety and a lot of publicity. GM wheat is more ambiguous but it seems that the wheat will not come on the market for some time because of consumer concerns. Even the Canadian WHeat BOard has opposed its release on the market right now. GM potatoes have been a disaster so far for developers as large purchasers and processing plants will not touch them, at least in Canada. 6) Aren't organic commodities differentiated from non-organic even though there are no intellectual property protections? Or are state sanctioned requirements to be organic such? Cheers, Ken Hanly - Original Message - From: Max Sawicky [EMAIL PROTECTED] To: [EMAIL PROTECTED] Sent: Thursday, December 27, 2001 12:15 PM Subject: [PEN-L:20968] RE: Re: Re: RE: Farm subsidy data base That's a useful distinction, but I would say it is the commodity sector that 'works' as far as markets go, and the other one that doesn't. The stability of the intellectual-prop sector preserves its inefficiency and unfairness. Market functionality travels over the dead bodies of failed suppliers. -- mbs Gene, I have been pushing the idea that the economy breaks into two different sectors. 1 consists of the undifferentiated commodities, and the other, those sectors protected by intellectual property rights. The former will remain in trouble while the latter will prosper as long as it is backed by state power. But then, you will have to wait until my book comes out in a few months On Thu, Dec 27, 2001 at 09:47:31AM -0800, Eugene Coyle wrote: My argument is that selling an undifferentiated commodity on the market -- like many farm commodities -- actually results in prices that only cover marginal costs, not average costs. The difference has to be made up somehow. That is what I see as the idea behind farm subsidies. -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail [EMAIL PROTECTED]
Re: Re: RE: Re: Re: RE: Farm subsidy data base
Excellent questions, Ken. Ken Hanly wrote: 2) Why is the sector involving intellectually protected sector differentiated? When the protection runs out are the commodities undifferentiated as the now competing types of glysophate? They are differentiated only because they are protected not qua product. Related to this matter In addition, many types of intellectual property are differentiated because competition is prohibited. 3) Many commodities not protected by intellectual property rights seem differentiated. For example there is feed and malting barley and different varieties of each not counting hybrids. In the case of grains there is always price differentiation in terms of grade. In crops such as apples they are surely not sold just as apples but as this or that type and quality. But perhaps you are using undifferentiated in a technical way I do not understand. Undifferentiated may have been an unfortunate word choice. The feed barley is undifferentiated insofar as the purchasers do not differentiate among the various growers. 5) Intellectual property rights backed by state power does not necessarily bring success. A good example is GM flax. A patent was issued to a U of Sask prof. who gained nothing except notoriety and a lot of publicity. GM wheat is more ambiguous but it seems that the wheat will not come on the market for some time because of consumer concerns. Even the Canadian WHeat BOard has opposed its release on the market right now. GM potatoes have been a disaster so far for developers as large purchasers and processing plants will not touch them, at least in Canada. Of course, merely offering intellectual property without any use value will not be profitable. -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail [EMAIL PROTECTED]
