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Incorrect. The supposed MR=MC law means that the entire economy is zero-sum and wealth creation is impossible. His reasoning also directly translates to real wo
by nootropicat 7y ago
Incorrect. The supposed MR=MC law means that the entire economy is zero-sum and wealth creation is impossible. His reasoning also directly translates to real world physical security, as in, if you want to protect wealth worth $1000 from theft, according to him you have to spend $1000-epsilon, otherwise someone is going to outspend you and steal it. Fortunately, that's not how the world works.
Visual illustration of the asymmetric security in action: https://www.pohjoiseen.fi/wp-content/uploads/2016/03/20839601684_2c10210f03_o-800x531.jpg https://www.pohjoiseen.fi/wp-content/uploads/2016/03/2083960...
- jotakami 7y agoFortunately, we get asymmetric security through laws and criminal punishment rather than machine gun bunkers. Also, MR=MC doesn’t imply that wealth is never created, it just means that it can’t be created purely through exchanging commodities.
- nootropicat 7y agoNothing special about commodity exchange. The difference between marginal revenue and marginal cost is marginal wealth creation (destruction if negative). A world in which MR=MC is in a global maximum and no improvement is possible - any state changes imposed externally can either lead to the same score ('wealth') or make it worse. In other words, he first assumes that no improvement is possible, and then indeed manages to show that, according to the assumptions, no improvement is possible.