- Capitalism and Alternatives -

I disagree.

Posted by: DonS ( USA ) on December 01, 1999 at 10:33:58:

In Reply to: 'Demand' - wih correct links posted by Stoller on November 30, 1999 at 18:58:24:

: I suspect your adherence to the STV (last seen as farce here) and my fealty to the LTV (explained succinctly here) has prevented our dialogue from having much merit...

Don: I disagree. A dialogue doesn't have to convince one of the players in order to have merit.

: You posit that 'demand' (consumer demand) motivates the market. This, I believe, does violence to the facts. Example: there is plenty of demand for affordable HEALTH CARE in this country but because PERSONAL COMPUTERS are more profitable to make, supply chases the easier dollar---which, in turn, affects 'demand' overwhelmingly.

Don: As far as I can tell, the supply of both is more than ample. My father received health care which he couldn't pay for. He got the care he needed, and the hospital absorbed the costs he couldn't pay.

: Veblen: '[B]usiness enterprise is a pursuit of maximum net gain in terms of price, not of maximum production in terms of goods' (Absentee Ownership [1923], Beacon Press 1967, p. 382, n. 26).

Don: Agreed.

: Don: If you have good reason to think you can drive the competition into the ground and then put the price of candy bars as high as you want, that *may* be a possible motivation. You will have to accept lower profits while the price war is in effect, and you have to be able to "win" the price war for it to make any sense.

: When I speak of competition, I do not especially refer to the superannuted notion of price competition.

Don: In the argument that lead into this, we were discussing price specifically, so it seems to me that you are changing the subject.

: I refer to competition of production process (which includes labor), advertising, and---especially---access to special privileges and subsidies maintained by the government.

Don: The last part I would classify as fascism. A free market doesn't exist when the government starts playing favorites . . .

: : What will likely make the most sense is to not undercut the competition's prices, and to optimize your own profits.

: I think you, me and Veblen are in agreement here.

: Don: The point is that competition only comes into play if demand is insufficient for the needs of all the producers.

: Consumer-motivated 'demand' as a theory went splat here.


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