Browsing All posts tagged under »Capital«

Economic calculation revisited – the case of monopoly, socialism and the Road to Serfdom

April 10, 2011

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The economic calculation problem of socialism is similar to the problem of economic calculation under monopoly. However, the absence of private ownership under socialism adds an additional layer of chaos to socialism, which is exacerbated under democratic political competition. This is what makes monarchy preferable to democracy, yet inferior to a free market of security. […]

Unemployment as a consequence of failed capital policy

October 11, 2010

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The business cycle creates a disequilibrium in capital which in turn reduces employment. Stimulating demand may only stimulate those capital goods that are already fully employed. Without additional investment, no further job growth will take place. In any economy, employment is tied to capital goods. Robinson Crusoe may arrive on the island with barely clothes, […]

Monopoly, competition, supply and demand

September 19, 2010

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Market prices are driven by supply and demand. Competition in a market is the freedom to increase the supply. Markets that are oversupplied may create a situation where prices are so low that no firms can earn profits increasing the supply, or only one gigantic firm can. This is not a monopoly situation, while a […]