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Actually, no extra money will flow from NJ to California. Consumers will pay less for their cars, and the extra $1000-$2000 dealerships make on each car, will
by winter_blue 12y ago
Actually, no extra money will flow from NJ to California.
Consumers will pay less for their cars, and the extra $1000-$2000 dealerships make on each car, will remain in the consumer's pocket. This is better on the whole.
Dealerships are market inefficiencies, as they create no real value or "wealth"[1]. They give nothing to consumers in return for the $1-$2k extra that consumers pay for each car.
[1] As defined by Paul Graham in: http://paulgraham.com/wealth.html http://paulgraham.com/wealth.html
- rayiner 12y agoEliminating an economic inefficiency (the middle-man) creates a surplus. Where that surplus flows, whether to the consumer or the producer or split between both, depends on the market.
- hurin 12y ago> Dealerships are market inefficiencies, as they create no real value or "wealth"[1]. This is very surprising complaint to hear - the whole capitalist economy is filled with inefficiencies! (and Paul Graham is hardly saying something novel here).
- SilasX 12y agoThe GP wasn't saying that all middlemen add inefficiencies or destroy value, only that these particular ones do since you're forced to use them regardless of need.