On Sat, 14 Oct 2000, James A.. Donald wrote:
On a similar vein, just about every somehow understandable version of free arket theory is based on the assumption of a steady state market. The theory does not include a temporal element.
Your ignorance of economics is as breathtaking as your ignorance of African famines.
I freely admit that I have absolutely no authority over things economic. But I do think you too have an overly simplified view of the theory - you do not seem to distinquish between the derivation of some of the parameters (e.g. price) of a dynamic system which is assumed to be in equilibrium based on known ones (e.g. measures of/related to demand, availability etc.) from actually working with the time evolution of the system (none of the variables are known a priori and the solution consists of complete time functions). For instance, in the basic example given above - price formation of a single good in an ideal closed market (i.e. given the normal assumptions of independence of participants, continuity of variables, perfect knowledge and so on) - can you cite a single understandable source with the rigorous derivation of bounds for over/undershoot in price upon rapid fluctuation in supply? Indeed, even if we assume no stochastic element is present, I think this is a scenario in which solutions can be found which are far from optimal in the sense of stable state theory. When you refer to my ignorance, you perhaps mean that the above situation has in fact been rigorously analyzed. I've never claimed otherwise. The point is, such analysis is usually tricky enough to be incomprehensible to your average math graduate and it produces results which have little to do with the optimal-allocation-of-resources mantra of true free market believers.
How old are you?
I can't think of a single reason why a person interested in civilized
discussion would want to ask that. But 22 is the number.
Sampo Syreeni