Sunday, October 23, 2011

Order, predictability, and a good dose of conspiracy theory

Order fascinates me, most likely because organization is something that doesn't come naturally to me. This is why the statement, "There is a certain predictability to prices. An orderliness." stood out to me. It truly does beg the question, "What is the source of that order?", and more importantly, can this order be manipulated by external forces?

Russell Roberts argues that, "many of the policies that a president or legislators might propose to improve something, are often offset by market forces", but if this is true then why does government play such a significant role in regulating our economy? I have no doubt that if I could spend an afternoon with Dr. Roberts he could explain this statement to me, but as of right now I have a hard time understanding how an institution that has the ability to place constraints on both buyers and sellers doesn't have any affect on the determination of prices.

I also have to wonder if Roberts was making a blanket statement regarding governments, or if his position is only referring to republics. Does the ability of a government to influence prices change depending on how it is structured? Comparing Iran, which is a theocracy, with China, a communist state, with Israel, a parliamentary democracy, is like trying to compare apples with polar bears with lamp shades. I might be going slightly conspiracy theory, but if there was a non-market force that could impact prices, could it be used on a domestic as well as international level? If this could be developed, it could mean unmatched economic prosperity for whoever controlled it. According to the modern golden rule (he who has the gold makes the rule), this would concentrate power for whoever controlled the non-market force. In the right hands this could be used to promote positive initiatives, but in the wrong hands it could turn out worse than a zombie apocalypse. Well, maybe not quite that bad, but to sum up that ramble, there is certainly incentive to develop a force that could manipulate prices, but is it possible? If it were possible, how would such a force affect the international political and economic environment? Wow, that was a rabbit trial of paranoia, so maybe it's a good thing that a brilliant economist like Russell Roberts already ruled out that possibility :)

1 comment:

  1. I feel that by definition policy making is determining what actions are appropriate in the resident society. This can mean trade embargos, taxes, regulations, laws, and even smaller things like club rules and church dues. Since they are affecting ones actions, and it is accepted by the people under its rule, it seems to be that policy making has the ability to control the prices of any choice you make, as long as one is adhering to the policy. This can be chaotic good or chaotic bad, since all policy is in a sense a collective decision those decisions can be either good or bad. I agree with your points and to fully answer your question about how a price manipulating force could affect the international political and economical enironment , its that the political environment is a human development to fix the prices (total cost) of certain deicions. Like the one to commit 1st degree murder, they upped the ante and fixed the price around 15 years to life in federal prison. This manipulation of the price is to provide incentives to reduce the supply of murder, and that difference in price is borne on the brunt of the tax payers that have agreed to be in the united states and follow its laws. Our prices of everything , not just monetary or material, can be subject to manipulation, for good and bad. But personally I think overall more good then bad. :D