2 ms·

This is interesting, though a little self obvious. The thing is, with something seeming so predictable, how is it not damped by some kind of futures or derivat

This is interesting, though a little self obvious. The thing is, with something seeming so predictable, how is it not damped by some kind of futures or derivatives action of people or companies trying to take advantage of foreseeing surges and declines?

neilwilson 4y ago
Because the firms are monopolies. "Free market" theory works when there are lots of smaller sized firms all competing with each other such that none of them have market power. Then bankruptcy and the threat of bankruptcy does the controlling - although it doesn't stop smaller companies moaning that they can't pass on their cost increases. Correct you can't. Get better at what you do, or go bust to release space for those that can. Once firms get to the size where there is cross subsidy and back pressure, then you end up with a planned economy that is planned for the benefit of capitalist, not the majority. We used to have competition legislation that dealt with this.
- cratermoon 4y ago
  > Because the firms are monopolies And monopsonies. In terms of the situation the article discusses, that's arguably more important. If there are lots of little businesses, geographically distributed, the chances of them all ordering more or cancelling existing orders in synchronization is very small. But when you have one or a few large companies ordering nationally or multinationally, the peaks and valleys of the supply chain are going to be much more consequential. > We used to have competition legislation that dealt with this. https://www.yalelawjournal.org/note/amazons-antitrust-paradox https://www.yalelawjournal.org/note/amazons-antitrust-parado... Sections III and IV especially.