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> I need food to survive much more than Krogers needs my business to survive Yes, but you can buy from anywhere other than Krogers and the cost of switching is

> I need food to survive much more than Krogers needs my business to survive Yes, but you can buy from anywhere other than Krogers and the cost of switching is almost negligible. A job is very, very different in that regard. Responding to your edit: > As wages in one particular area increase, people respond to that price signal by learning the relevant skills and working in that field and getting greater salaries. Learning the relevant skills costs time and money. If your wage is too low, you won't be able to learn new skills. And moving and changing jobs is not that easy for most people.

missedthecue 6y ago
Yes, but you can buy from anywhere other than Krogers and the cost of switching is almost negligible. A job is very, very different in that regard. It doesn't matter who I buy from, I need food much more than any retailer needs my business. I can sell my labour to many different companies with a relatively low switching cost. The average time people between jobs is lower than it has ever been. Learning the relevant skills costs time and money. If your wage is too low, you won't be able to learn new skills. And moving and changing jobs is not that easy for most people. If the price of steel increased, building new mines to extract iron ore would cost great sums of money as well. It is not easy for all mining companies to do this. It doesn't mean that the market is not relying on price signals to coordinate the production of goods.
- gjulianm 6y ago
  > I can sell my labour to many different companies with a relatively low switching cost. Well, I disagree on this. Maybe you specifically can do it, but housing prices, healthcare costs, transport cost, family charges, etc, can make the cost and risk of switching prohibitive. Not to mention that "just switching" doesn't mean prices will be better. Just have a look at the latest stats on working poor people to imagine whether those can easily switch jobs and get better education. > If the price of steel increased, building new mines to extract iron ore would cost great sums of money as well. It is not easy for all mining companies to do this. It doesn't mean that the market is not relying on price signals to coordinate the production of goods. So there's a high cost of entry? That's very much a non-perfect market. A free market doesn't just "respond to price signals", that's a very low threshold as you'll hardly find a market that doesn't respond in any way to price changes. A free market has to respond to them in an elastic way.
  - missedthecue 6y ago
    Free market is not the same thing as a perfectly competitive market

missedthecue 6y ago

Yes, but you can buy from anywhere other than Krogers and the cost of switching is almost negligible. A job is very, very different in that regard. It doesn't matter who I buy from, I need food much more than any retailer needs my business. I can sell my labour to many different companies with a relatively low switching cost. The average time people between jobs is lower than it has ever been. Learning the relevant skills costs time and money. If your wage is too low, you won't be able to learn new skills. And moving and changing jobs is not that easy for most people. If the price of steel increased, building new mines to extract iron ore would cost great sums of money as well. It is not easy for all mining companies to do this. It doesn't mean that the market is not relying on price signals to coordinate the production of goods.

gjulianm 6y ago
> I can sell my labour to many different companies with a relatively low switching cost. Well, I disagree on this. Maybe you specifically can do it, but housing prices, healthcare costs, transport cost, family charges, etc, can make the cost and risk of switching prohibitive. Not to mention that "just switching" doesn't mean prices will be better. Just have a look at the latest stats on working poor people to imagine whether those can easily switch jobs and get better education. > If the price of steel increased, building new mines to extract iron ore would cost great sums of money as well. It is not easy for all mining companies to do this. It doesn't mean that the market is not relying on price signals to coordinate the production of goods. So there's a high cost of entry? That's very much a non-perfect market. A free market doesn't just "respond to price signals", that's a very low threshold as you'll hardly find a market that doesn't respond in any way to price changes. A free market has to respond to them in an elastic way.
- missedthecue 6y ago
  Free market is not the same thing as a perfectly competitive market