HOLY SHITSTORM

Microeconomics: the study of individual and firm provisioning decisions.

I've learned much about how monopolies behave (and of course markets and other models of industry structure). Let me just say that contrary to the popular consensus, monopolies are not inherently horrible, nor do they charge the highest price (a folly mostly conceived by people being all too familiar with corruption). They charge that which is most profitable, and they control the price by controlling how much they make, not by setting the price.

I have bad news: markets won't take care of themselves. Why? Because most markets in our culture do not exist. They aren't markets. So much to that should make sense intuitively, provided you're ready to break your rules that 1) markets are everything and 2) small business is the backbone to American economics. Let's debunk both those in one thought process.

So, your everyday life, you've been told supply and demand (which assumes a market with many buyers and sellers, standardized products, high competition, and the sellers have to take the market price or be pushed out of business) is the basis for our economy, yet given the assumptions above, does it really make sense that Wal Mart isn't the backbone of our economy? 1 in 7 US dollars runs through their walls. They do not employ as many people as small business does, and neither do corporations, that is fact. I'll tell you what they do though: sell. They have more sales and more money running through them than small businesses could ever dream of having. And when you consider where you buy your iPod, video games, TV, food, coffee drinks, Vehicles, and sodas at work and school, one should start concluding to themselves "I am buying these things literally from 100% of our corporations."

The backbone of our economy is the corporation. It is where the bulk of our money moves to and from, it supplies more goods and services than anything else. Now, back to monopolies:

It's amazing to think about the amount of people who think (and would testify) that monopolies are inherently evil, and then they turn on the local football game (for me, the Dallas Cowboys), root, yell, cheer, jeer at bad calls, and enjoy this product, this entertaining show, brought to you by a monopolized entity. That's right, folks, your pro sports teams are monopolies. Think about it deeply: who else in Dallas provides you professional football? They sell you jerseys, seats in their stands, lunchboxes, and their players endorse cars with car makers with bad songs in their ads. This led me to conclude something I never thought of: Monopolies are not inherently evil: they are inherently favored to succeed over competitive markets.

Then that statement got crushed.

"I have a patent for chocolate dog food! No one is selling it, who cares if the animal dies? It likes chocolate, lets feed it chocolate. Oh, and I have a patent, so no one else can make my secret food!" This would be the prime example of a monopoly failing. No one will buy chocolate (harmful) food for their pet dog Fluffy. This product will inevitably fail.

That led me to think about monopolies differently again: they are not inherently evil: they are simply a business industry where there is only 1 seller, differing from a market because of that fact. They have the same cost curves (except natural monopolies) but their revenue structures are different.

I'm off to accounting for the day. I'll post more economic good stuff later.

Peace, Love, and Ugali: Joining the Club!

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The Posts that may or may not ever be

Simple: I'm chasing. I figured out a long time ago I am constantly pursuing that which intrigues in the short term, never really looking up long enough to see the lng term consequence. There is, however a difference between unknowingly being in hot pursuit, and doing it intently with that knowledge tucked away like an old book on a forgotten shelf.

I don't much care for the mediocrities of most every day life. I'm attracted to passion, ingenuity, those who take leaps of faith and conquer what fears they may have about failure.

And that, my friends, is the point of this blog. I have nothing to say so much as something to read: the words which come from those who have taken leaps into an unknown world and use this as the means of communicating the events of their decision.

I will, however, post magic decks here from time to time.