This is perhaps the most difficult for people to swallow the economic pill. There are a couple , actually.
The first is that if a product or service is in high demand ( ie , is highly desired and people have the means to pay for it ) , the price must go up, and the producer must make more profit for him, and what is good for the economy. How so?
An argument that seems true on the surface is that people should not have to pay more for basic necessities like food , fuel, housing, etc. It is a natural belief , because everybody wants to get something for nothing : producers and consumers. And it seems unfair to pay high gas prices : feels stuck, just to buy enough gas to get to work to earn a meager salary to pay for their shabby housing, while the executive oil rolls in the dough, buying his fourth yacht. This seems unfair to you, if you want to increase their own salaries through legislation , while limiting the profits of oil companies. Can not believe it, but this is a big mistake .
I know I 'm going to call a greedy capitalist , etc etc, but as Hazlitt said repeatedly , we must look at the whole economic picture .
Let an oil company made huge profits. What are your advantages do ? They have no value for him unless he gives them to another person , who then give them to someone else , etc. So do not sit on the money , it helps the luxury industry in the housing industry properties : industries who have died without their huge profits (which means that none of these jobs exist).
But this is the photo to enlarge. What other effects of their huge profits ?
Prices and profits are essential to the health of an economy.
Prices should not be dictated by C (a collection of C or Z) that are exchanged between the parties A and B. Why is that? The government should not limit the price that can be charged for oil ?
Actually, no . What happens after the huge oil profits ?
Besides the fact that people get oil, create jobs (or rather , wealth is obtained through jobs (for those of you who do not understand, "wealth" is not an arbitrary number but improving the situation through trade , which includes receivables for work (ie , you are richer than you work without it) ) ) , and the expansion of the company increases both these things (the amount of oil that can be obtained and the amount of the claim (the desire for a product, and the means to do so) ) . Expansion will only occur if there is more profit to be made by the expansion.
These great benefits are an important signal that can be used in a free market system .
Other people may see high profits oil executives and they want to enter the oil market also . They will provide better services at lower prices if they want to eliminate a part of the business of another oil company. This means cheaper oil for consumers. All this was caused by the mechanism of self-regulation of the free market system benefits. As another oil company starts producing oil consumption (because you want to get some of the benefits that the first oil company received ) , more and more oil will be available to the public ( simply because the oil is extracted by two oil companies instead of the original), including those who do not have access to before (because the new oil company will make its oil available in other new areas ) , and as long as the field is profitable and produce more oil competitors want to get this benefit , which means more oil available at a cheaper price.
What if , for example, an industry has been a failure? Of course, the employees of this work would like the government gives money to the company ( a subsidy) and the jobs are not lost . But what happens ?
If a company fails , it simply means that you do not meet the needs of the market , which means that consumers do not want the product, it is not necessary that the product, or can not get the product. This means that your resources (consumers) are in other industries that are more profitable . This obviously means that they buy what they want and need.
So what does it mean when companies go bankrupt and businesses succeed ? This means that the company does not contribute to the consumer, while the growth of the company is ( can not grow if I made a profit, not gain an advantage if people paid , and people do not want to pay unless that they believe they will be better to buy a product from this company instead of another company ) .
This means that the capital has not been helping consumers in cases not now be used to help customers achieve business success . It also means that employees who have lost their jobs to the old company now failed can get new jobs in the growing business , as well as those who may have been previously unemployed because small businesses can not afford to hire more people, while the new box now .
The first is that if a product or service is in high demand ( ie , is highly desired and people have the means to pay for it ) , the price must go up, and the producer must make more profit for him, and what is good for the economy. How so?
An argument that seems true on the surface is that people should not have to pay more for basic necessities like food , fuel, housing, etc. It is a natural belief , because everybody wants to get something for nothing : producers and consumers. And it seems unfair to pay high gas prices : feels stuck, just to buy enough gas to get to work to earn a meager salary to pay for their shabby housing, while the executive oil rolls in the dough, buying his fourth yacht. This seems unfair to you, if you want to increase their own salaries through legislation , while limiting the profits of oil companies. Can not believe it, but this is a big mistake .
I know I 'm going to call a greedy capitalist , etc etc, but as Hazlitt said repeatedly , we must look at the whole economic picture .
Let an oil company made huge profits. What are your advantages do ? They have no value for him unless he gives them to another person , who then give them to someone else , etc. So do not sit on the money , it helps the luxury industry in the housing industry properties : industries who have died without their huge profits (which means that none of these jobs exist).
But this is the photo to enlarge. What other effects of their huge profits ?
Prices and profits are essential to the health of an economy.
Prices should not be dictated by C (a collection of C or Z) that are exchanged between the parties A and B. Why is that? The government should not limit the price that can be charged for oil ?
Actually, no . What happens after the huge oil profits ?
Besides the fact that people get oil, create jobs (or rather , wealth is obtained through jobs (for those of you who do not understand, "wealth" is not an arbitrary number but improving the situation through trade , which includes receivables for work (ie , you are richer than you work without it) ) ) , and the expansion of the company increases both these things (the amount of oil that can be obtained and the amount of the claim (the desire for a product, and the means to do so) ) . Expansion will only occur if there is more profit to be made by the expansion.
These great benefits are an important signal that can be used in a free market system .
Other people may see high profits oil executives and they want to enter the oil market also . They will provide better services at lower prices if they want to eliminate a part of the business of another oil company. This means cheaper oil for consumers. All this was caused by the mechanism of self-regulation of the free market system benefits. As another oil company starts producing oil consumption (because you want to get some of the benefits that the first oil company received ) , more and more oil will be available to the public ( simply because the oil is extracted by two oil companies instead of the original), including those who do not have access to before (because the new oil company will make its oil available in other new areas ) , and as long as the field is profitable and produce more oil competitors want to get this benefit , which means more oil available at a cheaper price.
What if , for example, an industry has been a failure? Of course, the employees of this work would like the government gives money to the company ( a subsidy) and the jobs are not lost . But what happens ?
If a company fails , it simply means that you do not meet the needs of the market , which means that consumers do not want the product, it is not necessary that the product, or can not get the product. This means that your resources (consumers) are in other industries that are more profitable . This obviously means that they buy what they want and need.
So what does it mean when companies go bankrupt and businesses succeed ? This means that the company does not contribute to the consumer, while the growth of the company is ( can not grow if I made a profit, not gain an advantage if people paid , and people do not want to pay unless that they believe they will be better to buy a product from this company instead of another company ) .
This means that the capital has not been helping consumers in cases not now be used to help customers achieve business success . It also means that employees who have lost their jobs to the old company now failed can get new jobs in the growing business , as well as those who may have been previously unemployed because small businesses can not afford to hire more people, while the new box now .
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