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I'd regard an ideal economy as one in which robust competition drives prices down and wages up, at the expense of profits. If we take as stipulated the idea th

I'd regard an ideal economy as one in which robust competition drives prices down and wages up, at the expense of profits. If we take as stipulated the idea that there are robust profits and low wages, that suggests market failure, especially in a mature space like fast food. More so, I think that my interlocutor regarded it as a problem, and he suggested that it was "common sense" that of course wages would always be at the minimum wage. His "common sense" idea doesn't take into account the major mechanism of price and wage levels that is supposed to exist in a market economy, and I was wondering why it was so conspicuously absent from his comment.

baddox 13y ago
> I'd regard an ideal economy as one in which robust competition drives prices down and wages up, at the expense of profits. I think that's fairly reasonable, although at what point do you say "profits are too high" or "wages are too low"? If the market can fail (which it obviously can), then what mechanism can we use to determine what is "optimal"? I do not think that monopoly regulation of the economy (i.e. government regulation and fiscal policy) should be expected to do better than the market.
- aetherson 13y ago
  I wasn't suggesting any particular solution -- and I share your pessimism regarding top-down regulatory approaches. I was really just trying to explore how and why we might imagine the market was failing here.