All Posts Tagged With: "supply and demand"

Muting Messages

As schoolchildren we learn of ancient kings who, when told of their armies’ defeats, angrily commanded that the messengers be put to death. Each of us recoils at the cruelty and pointlessness of such killings. We ask ourselves how anyone could be so foolish as to imagine that a messenger is in any way to [...]

1Oct2002 | | 0 comments | Continued

It’s Unpatriotic to Raise Prices After a Disaster?

One issue that caused a minor controversy after the terrorist attacks on September 11 was so-called price gouging. On his popular TV show, The O’Reilly Factor, Bill O’Reilly made a big deal of it with Jennifer Granholm, attorney general of Michigan, and Dan Mogin, a consumer lawyer from California. O’Reilly accused the Sheraton Hotel at [...]

1Feb2002 | | 0 comments | Continued

Socialized Medicine Is the Problem

Recently, Canadian Prime Minister Jean Chrétien changed his mind about his country’s system of socialized medicine. After long and hard opposition, he now favors a two-tier health system, including user fees and private provision. This makes it all the more important to take another look, not just at the surface of state-run medical care, but [...]

1Dec2001 | | 6 comments | Continued

Stop the Presses!

This just in: The law of supply and demand works. That seems to have come as a surprise to many people. Back in July, at the height of the summer driving season, the gasoline prices that had everyone so upset were—falling! As Associated Press reporter Lisa M. Collins wrote on July 17: Dire predictions of [...]

1Oct2001 | | 0 comments | Continued

Price Caps on Electricity Are a Good Idea?

Editor’s note: On July 4, shortly after this article was written, the San Francisco Chronicle ran this front-page headline: “Federal Price Limits Backfire.” Will price controls solve the California electricity crisis? Did price controls solve the oil crisis of the 1970s? Did price controls make apartments easily available in New York City? Of course not. [...]

1Oct2001 | | 0 comments | Continued

Economists’ Misplaced Faith in an Invisible Hand

Contributing editor Daniel Klein is associate professor of economics at Santa Clara University. He is editor of What Do Economists Contribute?, recently published by New York University Press and the Cato Institute. In academia most economists practice technical crafts. Academic incentives strongly favor such crafts, and economists pursue academic rewards, perhaps with a faith in [...]

1Aug2000 | | 0 comments | Continued

Israel Kirzner on Supply and Demand

Israel Kirzner misrepresents mainstream economics by his assertion that in explaining market price determination by supply and demand curves, it always assumes “perfect competition,” worse yet, perfect knowledge.[1] “The mainstream textbook approach . . . is, in one way or another, explicitly or implicitly, based on the assumption of perfect knowledge” and in which the [...]

1Jul2000 | | 0 comments | Continued

A Puzzle and Its Solution: Rejoinder to Professor Ahiakpor

I was at first puzzled by Professor James C. W. Ahiakpor’s charge that I had misrepresented mainstream economics (by my statement that mainstream economics’ use of its supply-and-demand apparatus relies on the assumption of perfect competition, and thus perfect knowledge). I was puzzled because mainstream textbooks are quite explicit on this point.[1] Upon re-reading Professor [...]

1Jul2000 | | 1 comment | Continued

Toward an Austrian Critique of Governmental Economic Policy

This is the fourth (and last) of a series of articles laying out some foundational elements of modern Austrian economics. Read the first article here, the second here, and the third here. In preceding articles we outlined the way in which Austrian economists understand the entrepreneurial competitive market process that is responsible for the law [...]

1Apr2000 | | 6 comments | Continued

The Market for Space in the Market

Gary Galles is a professor of economics at Pepperdine University in Malibu, Calif. Slotting fees—payments by producers for space on retailers’ shelves—are under attack. According to Senator Christopher “Kit” Bond of Missouri, chairman of the Senate Committee on Small Business, which held hearings last fall, the practice “threatens competition, jobs and likely drives up the [...]

1Mar2000 | | 0 comments | Continued

Entrepreneurial Discovery and the Law of Supply and Demand

This is the second in a series of articles laying out some foundational elements of modern Austrian economics. The first article is here, the third is here, and the final article is here. Last month we promised to explain how Austrian economics presents its understanding of the law of supply and demand by invoking the [...]

1Feb2000 | | 2 comments | Continued

The Law of Supply and Demand

This is the first in a series of articles laying out some foundational elements of modern Austrian economics. The second article is here, the third is here, and the final article is here. The theory of supply and demand is recognized almost universally as the first step toward understanding how market prices are determined and [...]

1Jan2000 | | 35 comments | Continued

The Force of Economics

Ninos Malek teaches economics at Valley Christian High School in San Jose, California, and is an economics lecturer at San dose State University and DeAnza College. A long time ago, in a galaxy far, far away . . . there were economists who tried to explain economics in clear terms. Unfortunately, there are only a [...]

1Dec1999 | | 0 comments | Continued

Subsidized Education

Russell Madden teaches at Mt. Mercy College in Cedar Rapids, Iowa. It’s an annual ritual. With a sense of dread tinged with resignation, college students, or their parents, wait to discover how much this year’s tuition will rise. Unlike their experience with new computers, they entertain no expectation that rates for their education will decrease. [...]

1Sep1999 | | 30 comments | Continued

Recycling Labor

In 1998 Boeing and MCI WorldCom, to mention only two, announced plans for massive layoffs. Boeing actually cut 48,000 jobs. Throughout 1998 there were many announcements of intended mergers—for example, Exxon with Mobil and Chevron with Shell—most of which included plans for substantial job cuts. Total layoff announcements in the United States in 1998 exceeded [...]

1Apr1999 | | 2 comments | Continued

Price Ceilings Cause Shortages and Higher Costs

The coordination of demand and supply, which we discussed last month, does not occur automatically. It is an example of Adam Smith’s invisible hand, which leads people interested only in pursuing their own interests to make choices that promote the interests of others as well. But the invisible hand, as amazing as it is, works [...]

1Nov1998 | | 0 comments | Continued

Social Cooperation and the Marketplace

The primary insights of economics come from explaining how individuals pursuing their own interests make choices that best enable others to pursue their interests as well. This social cooperation is not inevitable. It requires rules that motivate people to consider the concerns of others. The rules that accomplish this amazing feat define the free-market economy.[1] [...]

1Jul1998 | | 0 comments | Continued
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