One of the arguments that Whelan makes relates to the greater market on a global scale. Many markets are intertwined and in the United States the policy does not extend to the amounts of importing and exporting a company can do. A company can try and make the most of their products by paying the cheapest amount to create a product. In a sense they are trying to make the most "bang for their buck".
Another argument that Whelan makes is on the policies of markets in different countries. Certain countries, like the former Soviet Union, are forced to sell their products at a certain price, no matter the demand of that item. In these types of countries there is no incentive to do better than other competitors because the price of the item cannot be changed by the seller. In countries like the United States there are incentives for wanting to be the better business. It drives business' to be competitive striving to make its store better than the others by reducing prices or creating better quality items.
One more significant argument that Whelan makes is about the difficulty to determine exactly what the causes are that bring good results. It is in inexact science, where it is extremely difficult for one to separate variables and clue in on one variable as the main cause for a certain effect.
This blog lacks a complete understanding of what Whelan communicated about markets. There were a number of important concepts that relate to how markets can result in efficient allocation of resources. Even your paragraph on command economies did not clearly explain the efficiency related problems.
ReplyDelete3/5