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Old 10-13-2007, 12:02 AM   #24
Achilles
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Quote:
Originally Posted by John Galt
Even positive Governmental interference restricts the free market. It upsets market equilibrium, and harms competition in the private sector.
Huh? How can "equilibrium" and "free market" both be a priority. One is socialism and the other is capitalism. Socialism has controlled markets and capitalism has free markets. If So-and-so wants to buy from Company X, they should be free to do so. Company X works hard to produce a competitive product at a competitive price for the chance to increase market share (thereby "upsetting the equilibrium"). "Upsetting the equilibrium" is precisely what competition is.

Quote:
Originally Posted by John Galt
I suppose service rifles have become the de facto example of military products for this thread.
Sound good.

Quote:
Originally Posted by John Galt
Example: There are three companies: X, Y, and Z corporations, that manufacture civillian firearms and are basically in a state of perfect competition(which is basically the case in civillian firearms anyway).
Please operationally define what you mean by "perfect competition"? "Perfect competition" is actual an actual economic term may be being used out of context here.

Quote:
Originally Posted by John Galt
The Army needs 300,000 service rifles, and any of the three large manufacturers are capable of meeting that quota. Should the government choose, say, Y Corp. to manufacture its weapon, it gives Y corp. a competitive advantage over its competitiors, due simply to the size and constant nature of the contract versus the annual free-market cycle that effects civillian firearms.
Well, if we truly are in a state of perfect competition, then it doesn't really matter which firm the military gives the contract to. Since we are considering giving the contract to an outside entity, we can safely assume that we have already determined that it is more expensive to produce the weapons ourselves rather than buy them from someone else. And since each of the 3 company's products are exactly identical (perfect competition), then it doesn't really matter which one is selected (you'll get the exact same 300,000 units from company X as you would from company Y or Z). So since no one company has higher quality or lower costs, then you could easily let them "rock, paper, scissors" a decision for you.

But yes, whichever company did end up with the contract would then have a competitive advantage over the other and the scenario would no longer meet the criteria for perfect competition. Of course, this is precisely what it means to operate in a free market.

So at this point, I have to tell you that I'm completely at a loss as to whether you are for free markets or against them.

Quote:
Originally Posted by John Galt
In manufacturing its own rifles the government interferes less with the private sector, which is left to its own devices until wartime, when government demand for more firearms would necessitate contracts for X, Y, and Z corporations, benefitting all three of them. Smaller lots could also be produced at smaller companies, thereby providing additional production capacity during times of war or other emergency.
Yes, the private sector for rifles. You're still influencing the market for raw materials. Shouldn't we be concerned about those markets as well? Again, I'm not sure if you're aware of it or not, but your argument sounds a lot like socialism.
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