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Old 10-12-2007, 11:49 PM   #27
John Galt
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Originally Posted by Achilles
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.
I'll try to boil down what I'm trying to say in one sentence. It's not fair for the government to use large quantities of public money to grossly upset the market in a relatively small niche industry(civillian rifle production) and undermine competition there, leaving companies X and Z at a competitional disadvantage.

Originally Posted by Achilles
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.
I misremembered(nice Bushism there) the definition. What I was referring to is a situation in which multiple companies manufacture more or less identical products. I forgot the other traits of perfect competion. Mea culpa.

Originally Posted by Achilles
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.
Right, but it's still upsetting the market. It would be unfair to award any of those three companies the contract.

Originally Posted by Achilles
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?
Of course, but the market for raw materials, basically wood and steel, is much larger, and government procurements of those items would upset that market as much as, or perhaps even less than, the construction of new government buildings. Basically what I'm getting at is the size and relative stability of the market involved should determine the extent of government interference in those markets. Springfield Armory purchasing the materials necessary for the production of 300,000 service rifles would produce far smaller ripples on the larger raw materials market than would procuring 300,000 ready-made rifles from a single company in the much smaller firearms market.

essentially we need to be judicious in spending government funds so as not to create taxpayer-funded monopolies.

Wer mit Ungeheuern kämpft, mag zusehn, dass er nicht dabei zum Ungeheuer wird. Und wenn du lange in einen Abgrund blickst, blickt der Abgrund auch in dich hinein. -Friedrich Nietzsche, Jenseits von Gut und Böse
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