Okay, I don't understand this idea:
At the heart, that is why free-market theory is flawed: it assumes perfect information and perfect competition; but there is no such thing as perfect information or perfect competition, only approximations of those things. Which is why the market sort of looks like it acts similar to free-market theory predicts, but not quite.
Where in the world do people get these ideas from?? Who ever told this fellow that free markets require perfect information and perfect competition? Where does this idiotic idea come from? Is some bad teacher of economics running around saying it? Anybody know?
Miklos points me to Walras as a primary source of this idea. Obviously, Walras thought it was a good idea, but you can see from the quote above that it has had bad consequences among non-economists. I've found a book entitled Perfect Competition and the Transformation of Economics and may purchase and read it. Then again, at $220, maybe not. It's only $67 as a Kindle Book, and a Kindle is only $259 with an Amazon Visa. So, I could get buy the book and for an additional $100 get a Kindle.
posted at: 21:27 | path: /economics | permanent link to this entry