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On September 18 2013 12:02 Kiarip wrote:Show nested quote +On September 18 2013 10:19 oneofthem wrote:
lel say's law. the basic idea with it is that at any given transaction, the demand and supply are but two sides of the same coin.
but this obviousl ignores time and money, and this means the entire point of macroeconomics. to say it's a 'law' is beyond oblivious and arrogant. it's basically "if we assume time doesn't exist in our economy, then all these problems produced by time won't be there." hue Say's law wasn't always called a law and he didn't call it a law, and there aren't any real laws in economics like there are in physics anyways. It was originally called Say's conjecture/formulation, but for some reason it became better known as Say's Law. Law is a misnomer of course. Also, say's law doesn't say that supply and demand are two sides of the same coin. If anything that's more of a Keynesian statement. Say's law clearly does not deny that gluts can occur as a result of overproduction and thus it does take into account the investment necessary for the overproduction to occur (the time and money,) what Say's law denies, however, is that the glut is a result of a lack of demand, because supply is what creates the "demand curve"/consumer interest at various price levels and if the original investment of time and money was misplaced then it is what causes the glut and not some innate lack of demand in a given environment.
Say was not the discoverer of Say's Law. Originally it was not attributed to Say at all...
"Innate lack of demand"? I don't know what "innate" means in this case, but yes, it's clearly a primitive fallacy to state that there can never be a lack of demand. There's simply no reason to state this, and this has been long-refuted for a 3/4 of a century.
Corporate Hoarding is a problem in our current economic climate. It's one of the things holding our economy back. Say's Law, for instance, would say that there is no such problem, because money just gets reinvested (even though what really happens is that Banks just build up reserves). Say's Law ignores the issues of time and money. It's a fallacy.
Edit: I mean, if I started talking about how some sexist tradition must be upheld because it's Tradition. People would recognize that it's an Appeal to Tradition, for instance. How do you respond to somebody who says "Of course it's an Appeal to Tradition! You have to uphold Tradition!"?
That's what I feel like this conversation is. We're like "Say's Law is a fallacy because it doesn't take into account time and money" and his response is "No no, it totes works." What's the response to that???
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what's great is that these austrian school types make everyone else seem really, really sane by comparison. Where do they come from, I wonder
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On September 18 2013 12:54 farvacola wrote:Show nested quote +On September 18 2013 12:53 Kiarip wrote:On September 18 2013 12:41 farvacola wrote:On September 18 2013 12:38 Kiarip wrote:
"a glut can take place only when there are too many means of production applied to one kind of product and not enough to another"
Why? Edit: Try to use the most simple language possible. I posted a direct quote that's part of "Say's Law." It's saying that a glut is caused by a misallocation of resources. Yes, I know, but I'd like for you to explain why a glut can only take place in the manner described by Say's Law, unless you don't think so yourself.
I think a better idea would be for you to give an example of a glut that's not caused by a misallocation of resources, but if I had to try my argument would look something like this:
1) a) Specialization makes exchange mutually beneficial (increase in value)
b) Specialization increases productivity in a given task (increase in value)
2) Constant trade is a result of 1a, 1b.
3) In order for trade to stop either 1a or 1b need to stop being true.
3a) 1a) stops being true if one of the parties is offering a product that the other one doesn't need (so the trade is no longer mutually beneficial,)
3b) 1b) stops being true if the party specializes in an activity that doesn't have value for any of its potential trading partners.
both 3a) and 3b) are misallocation of resources.
On September 18 2013 12:55 DoubleReed wrote:Show nested quote +On September 18 2013 12:02 Kiarip wrote:On September 18 2013 10:19 oneofthem wrote:
lel say's law. the basic idea with it is that at any given transaction, the demand and supply are but two sides of the same coin.
but this obviousl ignores time and money, and this means the entire point of macroeconomics. to say it's a 'law' is beyond oblivious and arrogant. it's basically "if we assume time doesn't exist in our economy, then all these problems produced by time won't be there." hue Say's law wasn't always called a law and he didn't call it a law, and there aren't any real laws in economics like there are in physics anyways. It was originally called Say's conjecture/formulation, but for some reason it became better known as Say's Law. Law is a misnomer of course. Also, say's law doesn't say that supply and demand are two sides of the same coin. If anything that's more of a Keynesian statement. Say's law clearly does not deny that gluts can occur as a result of overproduction and thus it does take into account the investment necessary for the overproduction to occur (the time and money,) what Say's law denies, however, is that the glut is a result of a lack of demand, because supply is what creates the "demand curve"/consumer interest at various price levels and if the original investment of time and money was misplaced then it is what causes the glut and not some innate lack of demand in a given environment. Say was not the discoverer of Say's Law. Originally it was not attributed to Say at all... "Innate lack of demand"? I don't know what "innate" means in this case, but yes, it's clearly a primitive fallacy to state that there can never be a lack of demand. There's simply no reason to state this, and this has been long-refuted for a 3/4 of a century.
There can be a lack of demand, but it's caused by a misallocation of resources.
[/quote]
Corporate Hoarding is a problem in our current economic climate. It's one of the things holding our economy back. Say's Law, for instance, would say that there is no such problem, because money just gets reinvested (even though what really happens is that Banks just build up reserves). Say's Law ignores the issues of time and money. It's a fallacy.[/QUOTE]
It doesn't ignore time and money. Time + money is investment. Even if you don't use it on anything it's still an investment. What he does ignore to a large extent is the value of information. There are problems with the way the government is trying to control the economy which results in the stockpiling of currency, because of the uncertainty regarding the best way to use it. Remember, last time the government tried to convince that everyone in America should be able to get a home and the banks had no problem giving away pretty low interest loans to just about everyone. It's a crisis of information, Say's argument concern's a "rational businessman" and can't be readily applied this case.
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On September 18 2013 12:53 Kiarip wrote:
His argument is basically saying that a perfectly wise businessman will be able to avoid all gluts on the products he produces because regardless of the state of the economy there is going to be some product that's in high demand and he will produce that product and then he will continue to use his perfect-wisdom to buy appropriate resources to produce the next appropriate product to sell.
Therefore it follows that a general glut is impossible.
Of course in Say's times people didn't quite understand the real value of information to economy so the "perfectly wise businessman" isn't realistic with respect to an entire economy but is still quite realistic with respect to a specific sector.
So, because an imaginary perfect businessman can be imagined to perfectly shift his mode of production/item produced along with market demand, it follows that a general glut is impossible?
On September 18 2013 13:17 Kiarip wrote:Show nested quote +On September 18 2013 12:54 farvacola wrote:On September 18 2013 12:53 Kiarip wrote:On September 18 2013 12:41 farvacola wrote:On September 18 2013 12:38 Kiarip wrote:
"a glut can take place only when there are too many means of production applied to one kind of product and not enough to another"
Why? Edit: Try to use the most simple language possible. I posted a direct quote that's part of "Say's Law." It's saying that a glut is caused by a misallocation of resources. Yes, I know, but I'd like for you to explain why a glut can only take place in the manner described by Say's Law, unless you don't think so yourself. 3) In order for trade to stop either 1a or 1b need to stop being true.
Why? Specifically why are 1a and 1b the only premises to be accounted for? And what does "stopping trade" imply? A glut?
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I think you've solved The Economy sir.
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On September 18 2013 13:18 IgnE wrote:
I think you've solved The Economy sir.
he's too smart for me, at least! I don't understand a word he says!
edit:
+ Show Spoiler +Original Message From sam!zdat: Show nested quote +Original Message From Kiarip: Original Message From sam!zdat: haha ok kid I wish I could be a fly on the wall in your brain right now Original Message From Kiarip: I'm having problems believing that you even know what Say's Law is. Original Message From sam!zdat: oh come on. I'm pretty sure none of those people accept says law. The third one, I'm quite sure, because I've read it who are you?? I'm so curious. How did you come about? What is going on in there?? Original Message From Kiarip: The General Theory of Employment, Interest and Money by Keynes Fatal Conceit by Hayek Capital by Marx are a good start, have fun. Original Message From sam!zdat: never. But give me some recommendation and I might start. Original Message From Kiarip: Original Message From sam!zdat: self-'educated' internet weirdo it is it IS austrian school, right? I'm correct about this? Your economics education is all from mises.org? Original Message From Kiarip:
[quote]
Son? Please, don't try to patronize me. You're the communist in this conversation so please behave like the intellectually inferior that you are, otherwise we can't continue this conversation. It's from books. Do you ready books? I'm too smart for you. And I'm not a "kid." bye.
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On September 18 2013 13:18 farvacola wrote:Show nested quote +On September 18 2013 12:53 Kiarip wrote:
His argument is basically saying that a perfectly wise businessman will be able to avoid all gluts on the products he produces because regardless of the state of the economy there is going to be some product that's in high demand and he will produce that product and then he will continue to use his perfect-wisdom to buy appropriate resources to produce the next appropriate product to sell.
Therefore it follows that a general glut is impossible.
Of course in Say's times people didn't quite understand the real value of information to economy so the "perfectly wise businessman" isn't realistic with respect to an entire economy but is still quite realistic with respect to a specific sector. So, because an imaginary perfect businessman can be imagined to perfectly shift his mode of production/item produced along with market demand, it follows that a general glut is impossible?
Yes. If it is possible to build a successful business with customers when everyone else is failing, then it isn't a general glut.
Look, if everyone is using all their resources to build giant rockets that no one needs, then it's technically a "general glut," because NO ONE wants the rockets and the production just keeps on trucking away, but this isn't a sustainable scenario because no one is gonna keep building the damn rockets.
Barring such a scenario, from the theoretical possibility of the "perfect businessman" being able to produce the goods that will meet a demand it does follow that the economy isn't in a "general glut" and better business decision can solve the problem through correct production, profitability and appropriation of further resources.
Show nested quote +On September 18 2013 13:17 Kiarip wrote:On September 18 2013 12:54 farvacola wrote:On September 18 2013 12:53 Kiarip wrote:On September 18 2013 12:41 farvacola wrote:On September 18 2013 12:38 Kiarip wrote:
"a glut can take place only when there are too many means of production applied to one kind of product and not enough to another"
Why? Edit: Try to use the most simple language possible. I posted a direct quote that's part of "Say's Law." It's saying that a glut is caused by a misallocation of resources. Yes, I know, but I'd like for you to explain why a glut can only take place in the manner described by Say's Law, unless you don't think so yourself. 3) In order for trade to stop either 1a or 1b need to stop being true. Why? Specifically why are 1a and 1b the only premises to be accounted for? And what does "stopping trade" imply? A glut?
Well if the argument 2 states that: "If 1a AND 1b are true then constant trade is true."
then the contra-positive/logically equivalent statement is that: "IF trade is not true, then either 1a or 1b must be false."
Of course, like I said this is a rough argument. No trade = no consumption of the excess products produced due to specialization, so yeah that would create the "glut."
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On September 18 2013 13:23 sam!zdat wrote:Show nested quote +On September 18 2013 13:18 IgnE wrote:
I think you've solved The Economy sir. he's too smart for me, at least! I don't understand a word he says! edit: + Show Spoiler +Original Message From sam!zdat: Show nested quote +Original Message From Kiarip: Original Message From sam!zdat: haha ok kid I wish I could be a fly on the wall in your brain right now Original Message From Kiarip: I'm having problems believing that you even know what Say's Law is. Original Message From sam!zdat: oh come on. I'm pretty sure none of those people accept says law. The third one, I'm quite sure, because I've read it who are you?? I'm so curious. How did you come about? What is going on in there?? Original Message From Kiarip: The General Theory of Employment, Interest and Money by Keynes Fatal Conceit by Hayek Capital by Marx are a good start, have fun. Original Message From sam!zdat: never. But give me some recommendation and I might start. Original Message From Kiarip: Original Message From sam!zdat: self-'educated' internet weirdo it is it IS austrian school, right? I'm correct about this? Your economics education is all from mises.org? Original Message From Kiarip:
[quote]
Son? Please, don't try to patronize me. You're the communist in this conversation so please behave like the intellectually inferior that you are, otherwise we can't continue this conversation. It's from books. Do you ready books? I'm too smart for you. And I'm not a "kid." bye.
Oh man, you should definitely read The Fatal Conceit, Sam. It's a thrilling tale of one man's journey towards absolution as he single-handedly discredits all of socialism with, "To the naive mind that can conceive of order only as the product of deliberate arrangement, it may seem absurd that...order...can be achieved more effectively by decentralizing decisions...The alterable division of the power of disposal over particular resources among many individuals...obtained through individual freedom and several property makes the fullest exploitation of dispersed knowledge possible"
Boom, roasted like Kenny Roger's Roasters.
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On September 18 2013 13:42 Kiarip wrote:
Well if the argument 2 states that: "If 1a AND 1b are true then constant trade is true."
then the contra-positive/logically equivalent statement is that: "IF trade is not true, then either 1a or 1b must be false."
Ok, but that still doesn't account for how arbitrary this distinction is. Why are 1a and 1b the only constraints for trade?
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Cayman Islands24199 Posts
investment is not the only problem with time and money. inventory, complex market cycles (bubbles) etc are all things absent here.. essentially, reducing the market into this automatically adjusting mechanism operated on teh supply side is going to either be inaccurate or trivial(when you use investment change to account for long term change in production).
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the quote tree for some reason won't show the part where he said I read too much marx, which is what makes the recommendation to read capital the more hilarious. But my phone has a weird relationship with bb formatting it seems
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On September 18 2013 13:46 farvacola wrote:Show nested quote +On September 18 2013 13:42 Kiarip wrote:
Well if the argument 2 states that: "If 1a AND 1b are true then constant trade is true."
then the contra-positive/logically equivalent statement is that: "IF trade is not true, then either 1a or 1b must be false."
Ok, but that still doesn't account for how arbitrary this distinction is. Why are 1a and 1b the only constraints for trade?
they're not only constraints for trade. there maybe other reasons that trade could occur, but those 2 reasons are enough for trade to occur on their own, because it's mutually beneficial (so both parties agree,) and it's mutually beneficial because both parties need more than 1 product and they both produce an excess to what they need of the product that they are specialized in producing.
investment is not the only problem with time and money. inventory, complex market cycles (bubbles) etc are all things absent here.. essentially, reducing the market into this automatically adjusting mechanism operated on teh supply side is going to either be inaccurate or trivial.
It is accurate assuming perfect information into the future. Which, I suppose also makes it trivial like you said. But it's not like you can provide me with a non-trivial example of a perfect "general glut." Imperfect information can still provide imperfect but positive results which too serve as proof to lack of the "general glut."
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On September 18 2013 13:51 Kiarip wrote:Show nested quote +On September 18 2013 13:46 farvacola wrote:On September 18 2013 13:42 Kiarip wrote:
Well if the argument 2 states that: "If 1a AND 1b are true then constant trade is true."
then the contra-positive/logically equivalent statement is that: "IF trade is not true, then either 1a or 1b must be false."
Ok, but that still doesn't account for how arbitrary this distinction is. Why are 1a and 1b the only constraints for trade? they're not only constraints for trade. there maybe other reasons that trade could occur, but those 2 reasons are enough for trade to occur on their own, because it's mutually beneficial (so both parties agree,) and it's mutually beneficial because both parties need more than 1 product and they both produce an excess to what they need of the product that they are specialized in producing.
But, if there are alternate reasons for trade to occur, the notion that a generalized glut is impossible given proper resource allocation loses quite a bit of traction, don't you think?
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On September 18 2013 13:51 Kiarip wrote:Show nested quote +On September 18 2013 13:46 farvacola wrote:On September 18 2013 13:42 Kiarip wrote:
Well if the argument 2 states that: "If 1a AND 1b are true then constant trade is true."
then the contra-positive/logically equivalent statement is that: "IF trade is not true, then either 1a or 1b must be false."
Ok, but that still doesn't account for how arbitrary this distinction is. Why are 1a and 1b the only constraints for trade? they're not only constraints for trade. there maybe other reasons that trade could occur, but those 2 reasons are enough for trade to occur on their own, because it's mutually beneficial (so both parties agree,) and it's mutually beneficial because both parties need more than 1 product and they both produce an excess to what they need of the product that they are specialized in producing.
We haven't had a barter economy for hundreds of years.
On September 18 2013 13:49 sam!zdat wrote:
the quote tree for some reason won't show the part where he said I read too much marx, which is what makes the recommendation to read capital the more hilarious. But my phone has a weird relationship with bb formatting it seems
Where's your damn computer?
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On September 18 2013 13:17 Kiarip wrote:Show nested quote +On September 18 2013 12:54 farvacola wrote:On September 18 2013 12:53 Kiarip wrote:On September 18 2013 12:41 farvacola wrote:On September 18 2013 12:38 Kiarip wrote:
"a glut can take place only when there are too many means of production applied to one kind of product and not enough to another"
Why? Edit: Try to use the most simple language possible. I posted a direct quote that's part of "Say's Law." It's saying that a glut is caused by a misallocation of resources. Yes, I know, but I'd like for you to explain why a glut can only take place in the manner described by Say's Law, unless you don't think so yourself. I think a better idea would be for you to give an example of a glut that's not caused by a misallocation of resources, but if I had to try my argument would look something like this: 1) a) Specialization makes exchange mutually beneficial (increase in value) b) Specialization increases productivity in a given task (increase in value) 2) Constant trade is a result of 1a, 1b. 3) In order for trade to stop either 1a or 1b need to stop being true. 3a) 1a) stops being true if one of the parties is offering a product that the other one doesn't need (so the trade is no longer mutually beneficial,) 3b) 1b) stops being true if the party specializes in an activity that doesn't have value for any of its potential trading partners. both 3a) and 3b) are misallocation of resources.
2) I don't see how you are going to get 'constant' trade in the real world. A lot of supply and demand is lumpy.
Ex. Building a sky scraper dumps a lot of supply on the market at once. After, no one builds a new building for a while. It isn't that the building isn't needed (resources misallocated), so much as it's nature demands a stop / go production cycle.
Edit: Which can result in "lack of aggregate demand".
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On September 18 2013 13:54 farvacola wrote:Show nested quote +On September 18 2013 13:51 Kiarip wrote:On September 18 2013 13:46 farvacola wrote:On September 18 2013 13:42 Kiarip wrote:
Well if the argument 2 states that: "If 1a AND 1b are true then constant trade is true."
then the contra-positive/logically equivalent statement is that: "IF trade is not true, then either 1a or 1b must be false."
Ok, but that still doesn't account for how arbitrary this distinction is. Why are 1a and 1b the only constraints for trade? they're not only constraints for trade. there maybe other reasons that trade could occur, but those 2 reasons are enough for trade to occur on their own, because it's mutually beneficial (so both parties agree,) and it's mutually beneficial because both parties need more than 1 product and they both produce an excess to what they need of the product that they are specialized in producing. But, if there are alternate reasons for trade to occur, the notion that a generalized glut is impossible given proper resource allocation loses quite a bit of traction, don't you think?
Why do you think that? Proper resource allocation keep 1a and 1b true, which keeps the trade incentive true, which makes a general glut impossible.
On September 18 2013 13:56 JonnyBNoHo wrote:Show nested quote +On September 18 2013 13:17 Kiarip wrote:On September 18 2013 12:54 farvacola wrote:On September 18 2013 12:53 Kiarip wrote:On September 18 2013 12:41 farvacola wrote:On September 18 2013 12:38 Kiarip wrote:
"a glut can take place only when there are too many means of production applied to one kind of product and not enough to another"
Why? Edit: Try to use the most simple language possible. I posted a direct quote that's part of "Say's Law." It's saying that a glut is caused by a misallocation of resources. Yes, I know, but I'd like for you to explain why a glut can only take place in the manner described by Say's Law, unless you don't think so yourself. I think a better idea would be for you to give an example of a glut that's not caused by a misallocation of resources, but if I had to try my argument would look something like this: 1) a) Specialization makes exchange mutually beneficial (increase in value) b) Specialization increases productivity in a given task (increase in value) 2) Constant trade is a result of 1a, 1b. 3) In order for trade to stop either 1a or 1b need to stop being true. 3a) 1a) stops being true if one of the parties is offering a product that the other one doesn't need (so the trade is no longer mutually beneficial,) 3b) 1b) stops being true if the party specializes in an activity that doesn't have value for any of its potential trading partners. both 3a) and 3b) are misallocation of resources. 2) I don't see how you are going to get 'constant' trade in the real world. A lot of supply and demand is lumpy. Ex. Building a sky scraper dumps a lot of supply on the market at once. After, no one builds a new building for a while. It isn't that the building isn't needed (resources misallocated), so much as it's nature demands a stop / go production cycle.
I think this example still operates well outside the range of the economy being in a glut though. If you built a sky-scraper and you filled up all the offices except for 2 floors, then yeah building a second sky-scraper right away probably isn't a good a idea, but you wouldn't say that your office-space economy is in a glut, just because your new skyscraper still has 2 floors that haven't been rented.
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[B]On September 18 2013 13:55 IgnE wrote:[\b] Show nested quote +On September 18 2013 13:49 sam!zdat wrote:
the quote tree for some reason won't show the part where he said I read too much marx, which is what makes the recommendation to read capital the more hilarious. But my phone has a weird relationship with bb formatting it seems Where's your damn computer?
my computer is being rebuild by a wonderful wonderful man who knows how to do the illegal things, but I won't have it till next week. Until then I'm stuck with my 'palm pixi' held together with tape. Olim haec meminisse iuuabit fortasse
edit: we should have a drinking game where we take a shot every time he says 'proper resource allocation'
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On September 18 2013 14:06 Kiarip wrote:Show nested quote +On September 18 2013 13:54 farvacola wrote:On September 18 2013 13:51 Kiarip wrote:On September 18 2013 13:46 farvacola wrote:On September 18 2013 13:42 Kiarip wrote:
Well if the argument 2 states that: "If 1a AND 1b are true then constant trade is true."
then the contra-positive/logically equivalent statement is that: "IF trade is not true, then either 1a or 1b must be false."
Ok, but that still doesn't account for how arbitrary this distinction is. Why are 1a and 1b the only constraints for trade? they're not only constraints for trade. there maybe other reasons that trade could occur, but those 2 reasons are enough for trade to occur on their own, because it's mutually beneficial (so both parties agree,) and it's mutually beneficial because both parties need more than 1 product and they both produce an excess to what they need of the product that they are specialized in producing. But, if there are alternate reasons for trade to occur, the notion that a generalized glut is impossible given proper resource allocation loses quite a bit of traction, don't you think? Why do you think that? Proper resource allocation keep 1a and 1b true, which keeps the trade incentive true, which makes a general glut impossible. Show nested quote +On September 18 2013 13:56 JonnyBNoHo wrote:On September 18 2013 13:17 Kiarip wrote:On September 18 2013 12:54 farvacola wrote:On September 18 2013 12:53 Kiarip wrote:On September 18 2013 12:41 farvacola wrote:On September 18 2013 12:38 Kiarip wrote:
"a glut can take place only when there are too many means of production applied to one kind of product and not enough to another"
Why? Edit: Try to use the most simple language possible. I posted a direct quote that's part of "Say's Law." It's saying that a glut is caused by a misallocation of resources. Yes, I know, but I'd like for you to explain why a glut can only take place in the manner described by Say's Law, unless you don't think so yourself. I think a better idea would be for you to give an example of a glut that's not caused by a misallocation of resources, but if I had to try my argument would look something like this: 1) a) Specialization makes exchange mutually beneficial (increase in value) b) Specialization increases productivity in a given task (increase in value) 2) Constant trade is a result of 1a, 1b. 3) In order for trade to stop either 1a or 1b need to stop being true. 3a) 1a) stops being true if one of the parties is offering a product that the other one doesn't need (so the trade is no longer mutually beneficial,) 3b) 1b) stops being true if the party specializes in an activity that doesn't have value for any of its potential trading partners. both 3a) and 3b) are misallocation of resources. 2) I don't see how you are going to get 'constant' trade in the real world. A lot of supply and demand is lumpy. Ex. Building a sky scraper dumps a lot of supply on the market at once. After, no one builds a new building for a while. It isn't that the building isn't needed (resources misallocated), so much as it's nature demands a stop / go production cycle. I think this example still operates well outside the range of the economy being in a glut though. If you built a sky-scraper and you filled up all the offices except for 2 floors, then yeah building a second sky-scraper right away probably isn't a good a idea, but you wouldn't say that your office-space economy is in a glut, just because your new skyscraper still has 2 floors that haven't been rented.
Your definitions for things are so fluid. You are flirting with tautology.
But I really think you are on to something. If the world collapses, fiat currency becomes worthless, and debt is wiped out, I'll be sure to try and apply your principles.
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On September 18 2013 14:06 Kiarip wrote:Show nested quote +On September 18 2013 13:56 JonnyBNoHo wrote:On September 18 2013 13:17 Kiarip wrote:On September 18 2013 12:54 farvacola wrote:On September 18 2013 12:53 Kiarip wrote:On September 18 2013 12:41 farvacola wrote:On September 18 2013 12:38 Kiarip wrote:
"a glut can take place only when there are too many means of production applied to one kind of product and not enough to another"
Why? Edit: Try to use the most simple language possible. I posted a direct quote that's part of "Say's Law." It's saying that a glut is caused by a misallocation of resources. Yes, I know, but I'd like for you to explain why a glut can only take place in the manner described by Say's Law, unless you don't think so yourself. I think a better idea would be for you to give an example of a glut that's not caused by a misallocation of resources, but if I had to try my argument would look something like this: 1) a) Specialization makes exchange mutually beneficial (increase in value) b) Specialization increases productivity in a given task (increase in value) 2) Constant trade is a result of 1a, 1b. 3) In order for trade to stop either 1a or 1b need to stop being true. 3a) 1a) stops being true if one of the parties is offering a product that the other one doesn't need (so the trade is no longer mutually beneficial,) 3b) 1b) stops being true if the party specializes in an activity that doesn't have value for any of its potential trading partners. both 3a) and 3b) are misallocation of resources. 2) I don't see how you are going to get 'constant' trade in the real world. A lot of supply and demand is lumpy. Ex. Building a sky scraper dumps a lot of supply on the market at once. After, no one builds a new building for a while. It isn't that the building isn't needed (resources misallocated), so much as it's nature demands a stop / go production cycle. I think this example still operates well outside the range of the economy being in a glut though. If you built a sky-scraper and you filled up all the offices except for 2 floors, then yeah building a second sky-scraper right away probably isn't a good a idea, but you wouldn't say that your office-space economy is in a glut, just because your new skyscraper still has 2 floors that haven't been rented.
But now you have a bunch of unemployed construction workers and under utilized construction firms who are no longer buying as many goods and services.
Before they can be redeployed they can cause supply/demand to fall throughout the greater economy as 'gluts' in their would be demand appear.
Edit: Construction guys like trucks but don't buy when unemployed. Now you have a glut of trucks on dealer's lots. The dealer cuts prices / cancels orders. Now everyone in the entire supply chain can't buy as many trucks either and the cycle reinforces itself.
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HOUSTON (AP) — Thirteen people were arrested during a protest in downtown Houston in front of the offices of the company that is building the Keystone XL pipeline.
Those arrested Monday were part of a group of protesters outside the Houston office of TransCanada Corp. They were protesting the proposed 1,700-mile pipeline, which would carry oil derived from tar sands in Alberta, Canada, to refineries along the Texas Gulf Coast.
The 13 were arrested on misdemeanor trespassing charges after refusing to move from the front of the Canadian company's offices. Police say each person arrested faces up to 180 days in jail and a fine of up to $1,000 if convicted.
The pipeline is still waiting for federal approval. Opponents say they are concerned about potential environmental problems with the pipeline, including possible spills.
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