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Old 10-13-2007, 03:57 AM   #28
Achilles
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Quote:
Originally Posted by John Galt
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.
Okay. How is it fair to waste larger quantities of public money (taxes) by producing weapons when purchasing them is less expensive? Also, assuming that no collusion is taking place, companies X and Z were at a competitive disadvantage before the purchase took place. That's what happens in a competitive market; buyers buy the product that has the most competitive quality offered at the most competitive price. If that is what company Y was doing, then company Y has now been rewarded for it effort. Yay company Y. Yay free markets.

Again, you seem to think that this process undermines competition while I'm trying to point out that this process is competition.

Quote:
Originally Posted by John Galt
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.
Companies producing identical (not similar, identical) products is one of the criteria necessary for perfect competition. No worries though.

Love the bushism!

Quote:
Originally Posted by John Galt
Right, but it's still upsetting the market. It would be unfair to award any of those three companies the contract.
You can't avoid what you are describing in free market! It is absolutely "fair" (I prefer to deal with "equitable", but in this case "fair" still works) that the company with the most competitive product wins the contract. If we're still dealing with the hypothetical "perfect competition" model, then yes, maybe it isn't fair that one company gets it and the other two don't. That's not the military's fault. That's the company's fault for producing a product that is indistinguishable from products already in the market. This is like athletic teams that never try to do more than simply maintain a tie with the other team. Never happens in real life; one team is always trying to outscore the other. That's competition.

Quote:
Originally Posted by John Galt
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.
Huh? Purchasing 300,000 rifles gives one company a unfair advantage and disrupts the equilibrium of the market, but purchasing the materials to make 300,000 rifles doesn't accomplish the same thing in those respective markets? Seems to me that with more competitors, such a purchase would have more of an impact, not less.

Quote:
Originally Posted by John Galt
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.
So you're against free markets/capitalism. Just say so

Quote:
Originally Posted by John Galt
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.
I don't see how this is possible at all unless you're assuming that Springfield purchases equal amounts from all competitors.

Quote:
Originally Posted by John Galt
essentially we need to be judicious in spending government funds so as not to create taxpayer-funded monopolies.
I'm not sure I understand the leap in reasoning. So long as their aren't any barriers to entering the market and other companies are able to produce competitive goods, then no monopoly can exist.
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