Sources of market power

Market power arises from two sources: violence which avoids competition from other market participant and the favor of the people with which the market powerful trades. There is no third source whatsoever.

False dichotomy between profit and utility

The whole difference between the economic analysis of a consumer and that of a producer for the market is this: when you analyze a consumer you only pay attention on how the consumer tries to optimize value for himself while when you analyze a producer for the market you pay attention on how the producer tries to optimize value for buyers as a means to optimize value for himself.

Generation F: how common life will be in 2050

The problem:
Sexual maturity arrives at, say, 15 years old, but productive maturity arrives only after college graduation at, say, 25 (I'm thinking of post-degree). Those 10 years are years in which people want to have sex but feel that cannot afford to form a family. The  consequence is that by the time productive maturity arrives anti-family practices and then values have been consolidated. Plus, this enforces hedonism which in advance calls for selfish fun after productive maturity by renouncing to form a family, and to see having a wife and children as a sacrifice rather than an achievement.

The consequence of the problem:This will pressure to a more and more selfish, superficial life, to more vice, crime and degradation (particularly sexual degradation), to a dystopia, to general unhappiness.

The solution:
A scheme through which companies will hire people since 15 (sexual maturity) and technical education will be an in-house or at least very specific, long-term process. Education companies will sell to the companies, not to the students. Worker-students will learn in their job time, making a fuller use of new informatics technologies, professors will go to the company, university campus as we know them today will either disappear altogether or transform themselves into research companies. Study subjects will be very different for different people. It will be the end of one-fits-all curricula. Education will be paid by companies on condition of employee loyalty. Technical study will be more of a life-time slow process. Humanities or moral or religious education will be a private weekend activity. Work time will be short, maybe six or seven hours for men and even less for women (at least during pregnancy or lactation).

The consequence of the solution:
Since productivity will continue to be higher and higher, people will be able to afford big families, a lot of children will be the most conspicuous mark of status. Since families will become the most important life project again, companies will have to adapt to this. Companies will have their own day care for children and maybe the old. Maybe both husbands working for the same company or nearby companies will be very common. Companies will have their own schools and high schools, and will try to engage those young people into the next generation of worker-students. Companies will be less and less about producing a determined good and more and more about satisfying needs with the ultimate goods whatsoever in which the have some competitive advantage.

A true capitalist

A true capitalist is devoted to make money not to make politics.

Two sorts of arbitrage

There are both commercial and productive arbitrage.

Commercial arbitrage is the typically-seen arbitrage consisting in buying cheap and selling dear commodities without incurring in transaction costs.

Productive arbitrage occurs always that there is a difference between the value of a finished good on the one hand, and a set consisting of an input plus a transaction expenditure on the other. In this sense, it is the most convenient to conceive of the set of inputs as a synthetic, such as the term is used in finance.

Since productive arbitrage is less obvious and require expectations on more issues, it is conceivable that there is easier to find businesses opportunities this way.

Productive arbitrage is the reason behind producing.

Always that the ratio between output and inputs through production is perceived as different from the price ratio between these two sets of commodities which can be expected to be achieved in the market, a decision to change the current level of production will occur.

Market is the most efficient mechanism

The interaction of the information of agents with, in principle, different plans is the very definition of what a market is. It is true that a market could incorporate not all conceivable information, but markets do incorporate all possible information. If information is not already in the market, nobody (in particular, not the government authorities) can incorporate further information.

A market reaches all possible efficiency. There is no further informational, operating, or allocative efficiency beyond the market. In that sense, if you accuse the market of being inefficient, automatically you neglect the possibility of any further possibility whatsoever of improving that inefficiency.

If you do find a possibility of improving efficiency, you automatically become part of the market, not something beyond it.

There is, for instance, no way of reflecting new information faster than through the market. To put another way, the quickest way in which new information can be reflected is precisely what a market is.

Governance versus profit

No failure in corporate governance disproves the apodictic axiom of aiming at profit maximizing in every and all properly defined firm or entreprenurial project. What a failure in corporate governance demonstrates is merely the coexistence within the company of several differenciated firms, at least one of which exerts what from the ownership's point of view of the other firms is seen as coercion. This coercion, just to be clear, is different from market competition.

Alchemy economics

Chartism (euphemistically, technical "analysis") is alchemy economics in three senses:
1) it pursues golden correct price forecasts,
2) it ultimately doesn't achieve it,
3) it eventually brings closer the understanding of true economic science.

A proposal for market-led higher education

A proposal for several distinct but related industries, in principle decentralized:

Classroom rental. Or rather classroom, laboratory, or any other room (and tools) for teaching. A possible business model consists in auctioning classrooms for a definite period of time. So, the first rental company determines the length of terms, be semesters, thirds, quarters, etc. I guess that the auctioning would be directed towards teachers directly. Such aspects as classroom quality, building location, and period length would be a good contested by the firms serving the market, and this good would be separated from other industries such as teaching and certification. They could also, as a byproduct, sell curriculum prospects of registered students to the curriculum companies.

Teaching proper. The teacher would produce content for the courses and pedagogical ways of teaching. He would design syllabi, choose books if any, would arrange exercises as teaching tools, and would choose the number of classes to teach per week. The business model would consist in announcing the course, gain prestige, and charge students which attend the course, although of course class tasting could occur. Alternatively or supplementally, a patron could sponsor fully or partially a chair, so that would-be teachers could compete for that chair (maybe through ways arranged by the sponsor himself). For a new, innovative course or a new teacher, some sort of angel investment or joint venture could be advisable. Indeed, the teaching industry could be split between pure teaching and course design, although the common knowledge required would probably imply at least a moderate vertical integration among these two industries.

Curriculum. Specialized companies would work making research among potential employers of professionals on the one hand and offered courses (and the course design industry) on the other, so as to create a list of courses (a curriculum) ideal for distinct employers. These "curriculum companies" could also analyze which curricula are more demanded in the market, which are fashion and which ones outdated. They could also have statistics of how much students are enrolled under (at least stated) curricula. Employers could pay for the curriculum company to design curricula tailored at different levels for such employers or otherwise to know fashionable or otherwise successful curricula given market demand. They could even know potential supply of such curricula currently and for the foreseeable future. Curriculum companies could also sell advise services to new students so as for these to know the best prospects of curriculum ranked by employability or other variable.

Certification. Besides the mere course attendance, students could buy the service of course-attendance certification. They could also buy the service of course evaluation. This would create a specialized industry of individual course certification as well as of complete curriculum accomplishment.

This decentralization of the different industries which make higher education, would create competition among the different parts of higher education so that the student can get the best of each. It would also create room for innovation (for instance in course or curriculum designing) which, however, if failing, wouldn't attempt against the whole process of higher education. It would also create a closer relation between higher education programs and employers requirements. It would allow for smooth evolution of career curricula. Last but not least, it would allow that compromised professionals could deep and update their higher education as much as they want. Market has proved more effective than central planning in virtually every human activity. Higher education seems to be not the exception.

The market for protectionism

Protection from competition provided through coercion to competitors is like any other good. The producer will buy protection so long as he values better the income he receives than the expenditure he incurs in.

Profit

True profit is always for free. It is, as Knight writes (1), "unimputable income". That's why change in profit doesn't change purpuseful behavior to undertake: it is not action-changing.

(1) Knight, Frank. Risk, Uncertainty, and Profit. 1921 -1957-. Page 308 (chapter 10, paragraph 29).

In defense of extreme apriorism

It is not the task of the economist to determine whether actual equilibrium is going to be attained or not. His task comes to and end once he has correctly posed the role of the arbitrager in exclusively attaining such equilibrium as well as the enunciation of some general conditions from here on.

But when we, understandably anxious of arriving at specific equilibria, pretend to use economics to test or falsify empirical evidence of such equilibria or paths to equilibria, we ar at a total loss. And, as expected, the unfair condemnation of economics for no being "exact" or even useful at all doesn't take long to come out.

It is in that sense that Hayek is right in his 1937 paper Economics and Knowledge. Effectively, if you don't make certain assumptions about information, you are not going to be able to find equilibria. However, he is wrong in pretending that it is up to economics (the pure logic of choice) the accomplishment of this task. The methods and ways in which assumptions about the obtaining and coordination of information are entrepreneurial and far away from the method and traditional aim of economics. If you agree that that empirical task is a task of econonomics, you are compelled to accept as part of the tasks of economics the calculation of how to throw a ball in order to deceive a rival player and so scoring a goal or the successful bargain of the price of a Holstein cow in the town of Coronado, Costa Rica. Intuitively, you do not expect neither to require from an expert soccer player or a cattle merchant to take courses in what usually is taught in an economics course nor that an economist qua economist is prepared to score goals or evaluate cattle. Of course, you could require those abilities from whoever you call a competent economist and call this a merely semantic problem.

It is precisely difference about assumptions on information, particularly the non-coercive stickyness of prices which separate new Keynesianism from other brands of economics. So, you should conclude that the relevant difference doesn't deal with economics; it is rather ultra-economic.

Finally, you have other formal attempts to deal with the coordination through equilibrium, particularly game theory. And, in this, case, you have to note that game theory it's seen not just as an extension of economics, but rather as a quite independent discipline useful in several fields.

Profit and loss

Expenditure (paid price) is chosen sacrifice. The agent can only choose sacrifice if he expects the value of expenditure (cost) to be worse than the value of the income (revenue). Ex post, cost can be better than revenue, but ex ante this can not be planned. Loss is exclusively an ex-post phenomenon. Ex ante, the agent only acts on grounds of profit.

The pure arbitrageur

Arbitrageur is the agent in the role of discovering the opportunity for arbitrage. It is him who decodes an up-to-now non-apparent cheaper homogeneous good into an apparent one. In order to do so, he might have to look through transformations in time, place, and material manufacture as productive stages yet to be accomplished; but, to be sure, the arbitrageur qua arbitrageur doesn't produce. He just fore-sees the opportunity to buy cheap and sell dear.

Entrepreneur versus worker

The entrepreneur is, by definition, an ultimate decision taker. (1) Entrepreneurial human action is never based on obeying someone else's commands.

A human action undertaken by obeying other agent's command is not entrepreneurial but laboral. This is: labor is a human action commanded by someone else. So understood, labor can't be but social. Robinson Crusoe alone in his island can't be a worker. He'll remain an entrepreneur while not in the company of someone else's who gives him commands.

Human action only can be either entrepreneurial or laboral. The materialistic classification of goods of higher order among capital, labor, and land is an atavism of past political conflicts irrelevant to praxeology.

A command is understood as issuable only by agents and obeyable only by agents.

(1) Compare to Rothbard's Man, Economy, and State, page 64.

Production and valuation as opposed processes

Lower order goods give value to higher order goods used to produce the first ones. Value goes from lower to higher order goods.

The process of production goes all the way back. Higher order goods serve to produce lower order goods. Production goes from higher to lower order goods.

The role of the entrepreneur is guessing a production process which back-matches a process of deriving value. This and only this is what the role of the entrepreneur is all about.