Comments on: The Ultimate Source of Profit and Loss on the Market

By: Kalle

Kalle — Fri, 10 Sep 2010 19:27:08 +0000

Hmm, ok, that’s obvious

By: P.M.Lawrence

P.M.Lawrence — Fri, 10 Sep 2010 14:22:50 +0000

It is monstrous that Prince Louis Napoleon Bonaparte, the later Emperor Napoleon III, should have written many decades after Hume, Adam Smith, and Ricardo, “The quantity of merchandise which a country exports is always in direct proportion to the number of shells it can discharge upon its enemies whenever its honor and its dignity may require it.”

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.

By: Andrew

Andrew — Fri, 10 Sep 2010 12:18:39 +0000

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.

By: Jay Lakner

Jay Lakner — Fri, 10 Sep 2010 08:10:00 +0000

Yes. Its called fraud.

By: Kalle

Kalle — Fri, 10 Sep 2010 07:03:40 +0000

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.

By: Sean

Sean — Wed, 08 Sep 2010 21:42:49 +0000

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”.

By: Ted Stein

Ted Stein — Wed, 08 Sep 2010 20:31:02 +0000

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.

By: Allen Weingarten

Allen Weingarten — Wed, 08 Sep 2010 13:51:11 +0000

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.