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This paper describes the one idea that I have repeatedly tried to explain on HN: Demand is not unlimited. When you have a flame-bait title like this, the many

by codexon 17y ago

This paper describes the one idea that I have repeatedly tried to explain on HN: Demand is not unlimited. When you have a flame-bait title like this, the many die-hard libertarian/Austrians here will be sure to pull out the "broken window fallacy" and other knee-jerk retorts as evidenced by the other highly voted comments here.

WarDekar 17y ago
Demand may not be unlimited, but mass-(over)production sure tries to make it so. It's easy to artificially create demand that wouldn't have otherwise been there in a free(thinking) market.
- codexon 17y ago
  Demand is still very very far from unlimited, __especially__ when you take into account mass-production. http://www.guardian.co.uk/world/2010/jan/07/h-m-wal-mart-clothes-found http://www.guardian.co.uk/world/2010/jan/07/h-m-wal-mart-clo... In this example, if demand scaled along with production, there would be no need to junk clothes that didn't sell. According to you, they should've been sold! Instead, H&M is trying to maintain the scarcity/demand of their clothing by destroying excess products rather than give them to the poor. The people who have money simply don't need any more cheap clothes!
  - WarDekar 17y ago
    My point was, you know, sort of tongue-in-cheek... Of course demand can't be unlimited, but you're just further proving my point- corporations will produce and produce and produce far beyond the actual demand, because we aren't living in an actual free-market where if they get to a certain point they're losing money and go out of business. In this case, yes, H&M would go out of business if they just kept producing and producing, but just take a look at the corn industry in the US for a great example of production far exceeding what demand would ever be in anything close to a free market- in fact, we (I say we meaning the US since I'm from the US, but I obviously don't condone this practice) keep inventing new ways to use the corn because there's too damn much of it! Also, it may not be unlimited in the case you mention, but the consumerism ingrained in our societies is still striving for the goal of making it "unlimited" (as in bandwidth)- just because they aren't quite successful yet doesn't mean it's any good.
jacoblyles 17y ago
The number of people that don't understand basic economics very well is much greater than the number of people that understand it so well that they can ably critique it and support a view that contradicts the mainstream. Using Bayesian probability, it is far more likely that the average commenter on an internet message board espousing a new economic theory that seems to contradict the foundations of capitalism falls into the first category. The Broken Window Fallacy in particular is among the most common and grievous economic sins committed by journalists and the public at large, so it's worth repeating.
BearOfNH 17y ago
It may true that quantitative demand is limited, or at least marginal demand decreases with rising output and compensation. But quite the converse is true for quality of goods. Pilzer's book Unlimited Wealth goes into this in great detail. If I work harder I'll switch from burgers to rib eyes, Hondas to Teslas, etc. I was in Austria for the 1999 solar eclipse. Great place, wonderful people, home to a number of prominent historical figures.

by codexon 17y ago

WarDekar 17y ago

Demand may not be unlimited, but mass-(over)production sure tries to make it so. It's easy to artificially create demand that wouldn't have otherwise been there in a free(thinking) market.

codexon 17y ago
Demand is still very very far from unlimited, __especially__ when you take into account mass-production. http://www.guardian.co.uk/world/2010/jan/07/h-m-wal-mart-clothes-found http://www.guardian.co.uk/world/2010/jan/07/h-m-wal-mart-clo... In this example, if demand scaled along with production, there would be no need to junk clothes that didn't sell. According to you, they should've been sold! Instead, H&M is trying to maintain the scarcity/demand of their clothing by destroying excess products rather than give them to the poor. The people who have money simply don't need any more cheap clothes!
- WarDekar 17y ago
  My point was, you know, sort of tongue-in-cheek... Of course demand can't be unlimited, but you're just further proving my point- corporations will produce and produce and produce far beyond the actual demand, because we aren't living in an actual free-market where if they get to a certain point they're losing money and go out of business. In this case, yes, H&M would go out of business if they just kept producing and producing, but just take a look at the corn industry in the US for a great example of production far exceeding what demand would ever be in anything close to a free market- in fact, we (I say we meaning the US since I'm from the US, but I obviously don't condone this practice) keep inventing new ways to use the corn because there's too damn much of it! Also, it may not be unlimited in the case you mention, but the consumerism ingrained in our societies is still striving for the goal of making it "unlimited" (as in bandwidth)- just because they aren't quite successful yet doesn't mean it's any good.

jacoblyles 17y ago

The number of people that don't understand basic economics very well is much greater than the number of people that understand it so well that they can ably critique it and support a view that contradicts the mainstream. Using Bayesian probability, it is far more likely that the average commenter on an internet message board espousing a new economic theory that seems to contradict the foundations of capitalism falls into the first category. The Broken Window Fallacy in particular is among the most common and grievous economic sins committed by journalists and the public at large, so it's worth repeating.

BearOfNH 17y ago

It may true that quantitative demand is limited, or at least marginal demand decreases with rising output and compensation. But quite the converse is true for quality of goods. Pilzer's book Unlimited Wealth goes into this in great detail. If I work harder I'll switch from burgers to rib eyes, Hondas to Teslas, etc. I was in Austria for the 1999 solar eclipse. Great place, wonderful people, home to a number of prominent historical figures.