Monday, April 4, 2011

Markets Don't Exist

I was watching the erstwhile cathode ray tube machine and an ad came on for fruit stuck on sticks and sent as a gift.  I said that should anyone ever send me such a thing, I would punch them in the throat. Today I read:
“To understand this enigma, we must discard the naïve notion that free-market prices reflect what consumers are willing to pay,” Nobel laureate Joseph Stiglitz said. “Otherwise, how else are we to rationalize the phenomenon of a human being willingly spending 84 bucks on 18 green apple wedges and a Mylar balloon?”
I think he is misusing the word "willing" when he means something like according to the rational agent theory of market relations this obviously insane act is supposed to be rational. If I recall correctly, Charles Fourier saw a bushel of apples for sale at, let's say, 4 francs in country side and when he traveled to Paris he say an apple for sale at 4 francs.  It struck him as impossible that merely moving the apples from one place to another could have increased their value so dramatically. Obviously, moving them didn't cupidity did.

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