I remember reading somewhere that perfect competition under a free market was not really stable nor desirable.
This is because it causes profit margins to tend to 0 which has 2 negative effects:
* makes companies more fragile to externalities
* does not allow companies to accumulate treasuries that enable them to do research, innovate, take risks, etc
The end result is a stale stagnated balkanized economy. The corollary is that some market imbalances and assymetries are healthy.
Anyone knows where this reasoning comes from? Did I dream it up?
sommerfeld
npub16r…kz5pl
2024-08-17 13:39:14 UTC
Author Public Key
npub16r0tl8a39hhcrapa03559xahsjqj4s0y6t2n5gpdk64v06jtgekqdkz5plPublished at
2024-08-17 13:39:14 UTCEvent JSON
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"content": "I remember reading somewhere that perfect competition under a free market was not really stable nor desirable.\nThis is because it causes profit margins to tend to 0 which has 2 negative effects: \n* makes companies more fragile to externalities\n* does not allow companies to accumulate treasuries that enable them to do research, innovate, take risks, etc\nThe end result is a stale stagnated balkanized economy. The corollary is that some market imbalances and assymetries are healthy.\n\nAnyone knows where this reasoning comes from? Did I dream it up?",
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