The Market Doesn't Ration
Filed Under: Anything Peaceful
I want to give this one more shot.When I buy a pound of apples rather than two pounds because I want to use my remaining money for other goods, it makes no sense to say the market rationed the apples. It also makes no sense to say that the grocer rationed the apples.Similarly, if I am outbid for a quantity of steel because consumers are willing to pay more for my competitor’s final product than for mine, the market has not rationed steel.Voluntary exchange has taken place. Not rationing.We often talk about market’s rationing, but it is metaphorical not literal. Now, in the health care debate, that has come back to haunt us.The market does not ration. Details here
