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Why wouldn't it? It's an unrealistic expectation that the fact that we have ideas for certain econopolitical models and that they're superficially consistent in
by Daishiman 15y ago
Why wouldn't it? It's an unrealistic expectation that the fact that we have ideas for certain econopolitical models and that they're superficially consistent in normal discourse should mean that, in practice, they exhibit multiple negative behaviors.
All systems are flawed and unfair to some level, and there are tons of examples for capitalism in particular. The question is to what extent we can mitigate some of the negative effects and which ones we're willing to accept.
- joshAg 15y agodon't get me wrong, i agree that there's tons of flaws with capitalism, but i was curious as to why the natural emergence of cartels is considered a flaw.
- dingfeng_quek 15y agoCartel-like (monopoly/oligopoly) pricing leads to a non-optimal outcome (the loss is usually called the deadweight loss). The price is set higher than the socially optimal price - some consumers who would have benefited overall from the good (benefit from good > production cost of good) would not buy and consume the good because the price is higher than the production cost (price of good > benefit from good). If your curiosity is strong enough, you can find a more detailed outline of the concept in an introductory economic text.