For hundreds of years, politicians (like a certain current US president) have pushed the idea that one man’s profit is another man’s loss. The job of the state is to even the score. Mises explains that the whole assumption is wrong at its very core. FULL ARTICLE by Ludwig von Mises
Source link: http://archive.mises.org/13831/the-ultimate-source-of-profit-and-loss-on-the-market/
The Ultimate Source of Profit and Loss on the Market
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There is mutual interest within market activities, but not when there is warfare or intervention with the market. The error of the interventionist is conflating the market with anti-market activities.
Cleary the distance and conditions of travel did influence the trade balance and content. Americans learned to eat a great deal of salted fish, etc. Lucky for them there was a redy market of immigrants who were familiar with the cuisine. Not so much when it came to certain delicacies from foreign soil, too numerous to mention here.
This piece ignores the importance of trade agreements in preventing conflict. A piece I hope to see in the future.
I assume you refer to international trade. Aren’t such agreements necessary only in a context of preexisting, man-made barriers to trade? Without such barriers, “trade agreements” simply amount to “voluntary market exchange”.
Is there somewhere in this theory taken into account if one of the persons involved in a trade actively created the conditions for the other person to want to make the exchange in the first place? Therefore not using his foresight of things to come but actions to make things come the way he wants it to gain the most profit and kinda forcing the other person into a trade that would otherwise not have happened.
Like a doctor not healing a patient but just relieving him of symptoms so the patient has to come back again and pay again.
That way the doctor is truly living at the expense of the patient.
I hope to get this clarified. I have just started to get into austrian economics and there is still a whole lot to learn.
Yes. Its called fraud.
Hmm, ok, that’s obvious
But please unveil the secret, what about the problem of monopoly?
And how about an agreement between market parties to make profits at the expences of some third party?
The third party is not involved in the agreement and cannot “exit” it, and have no choice but to make the deal and loose. Loose as compared with the situation when no agreement exists.
Isn’t it amoral, but still more than possible on the free market?
There also some kinds of market advantage, like the network effect, when one biggest party becomes disproportionally [exponentially] mightiest and thus wealthiest and uncontestable. What about it? Isn’t it immoral and corruptive, but still free-market for the biggest player to push others out of the market to take the whole and become the tyran?
I don’t understand, perhaps I don’t know, so please, any ideas on further reading is appreciated.
What’s monstrous about it, other than the truism that it is a wicked world in which productive surplus can be applied to harmful as well as peaceful pursuits? It appears to be a factual claim about which things correlate with war making capacity. It is not an economic fallacy arrived at in ignorance of those thinkers at all.
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