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UNLESS it is a fundamentally demand starved economy where the wealth is concentrated in the hands of people that don't know how or have no clue how to increase
by cowardlydragon 11y ago
UNLESS it is a fundamentally demand starved economy where the wealth is concentrated in the hands of people that don't know how or have no clue how to increase flow of money.
Here's a clue: GDP goes up if people have money to buy things, which then causes people to get paid more and more jobs, which then gets more people money to buy things.
The "marketplace" or "free market" doesn't exist. Poof. Unless you are blind, "free markets" stabilize into cartel or monopoly power. Pick a goddamn industry, it is dominated by 1-4 players.
- bsbechtel 11y agoWhy are most industries dominated by a few? It's not because they pay the lowest. It's because consumers chose to support those few businesses.
- tma-1 11y agoNope, they're dominated by a few because when a specific company becomes successful enough it can buy out the rest of the players.
- Tideflat 11y agoThis only works when there are economies of scale. If there are significant dis-economies of scale smaller firms can out-compete the large firms. The large firm can't just buy up all the small firms either because new firms are started all the time, and if every person who starts a small firm is rewarded with a buyout, the industry will attract more and more new firms until the large firm can no longer afford to buy out new firms. --------------- Examples of industries that not dominated by three or four large companies: mining, farming, house cleaning, and being a land lord.
- tma-1 11y agoIt happens when large firms have a lot of extra liquidity and cheap debt. Look at FB and Google.