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Exactly, it’s the mechanism for exchanging information in a capitalist economy. Conversely, in Communist systems they could never get this right. Factories wer
by jack_riminton 3y ago
Exactly, it’s the mechanism for exchanging information in a capitalist economy.
Conversely, in Communist systems they could never get this right. Factories were just told to produce 5 or 10% more than last year, didn’t matter if the product quality was worse or if people didn’t want it.
- ffgjgf1 3y agoThere was some competition amongst consumer goods producers and TV and other ads in the UUSR. High scarcity of good quality stuff meant they didn’t need to advertise but there was also an oversupply of junk nobody needed. Those companies has to move their inventories somehow since it was much harder for them to go bankrupt.
- sharemywin 3y agounfortunately pure capitalism has no mechanisms for externalities and information hiding.