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Your reference says: "Companies earn just enough profit to stay in business" which contradicts your comment: "in a “perfect” market there cannot be profits"
I think the idea is that in the limit T->inf the profits go to zero.
Besides, who would run a business that could not make a profit?
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This is correct. More generally, there is absolutely no evidence that wealthier people do, on average, "leverage" technologies better. Ancient Rome is one example because while advanced technology existed, the wealthiest people were land owners taking in the profits of slave labor, not the architects and inventors who built temples and refined concrete. Of course, the same is true for modern society. Even so-called "…
> The wealthiest [Romans] were land owners taking in the profits of slave labor Not exactly. Crassus amassed his fortune first through conquest, and then through real estate speculation. Caesar and Pompey's fortunes were a mixture of family wealth and the spoils of war. There was certainly a class of wealthy Romans that derived their wealth -- and Rome's food supply! -- from land worked by slaves (mostly captured in…
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> And this includes Hedgefunds, like Melvin Capital, Citadel and the like? Doesn't the Robinhood and GME thing DIRECTLY contradict what you're saying? Meme stocks are a thing born out of social media just very recently and will most likely not happen that much given that now edge funds are aware of it and have probably already deployed the appropriate counter-measures.
> Meme stocks are a thing born out of social media just very recently and will most likely not happen that much given that now edge funds are aware of it and have probably already deployed the appropriate counter-measures. Tesla was called a meme stock, and it turned Elon into the World richest man (depending on the day or week) and he went on to invest in BTC and then pump DOGE in defiance of the SEC who stand on th…
Being called a meme stock doesn't mean being a meme stock and popular figures influencing stocks is nothing new. Tesla was never really a thing on WSB and it being overly shorted never really was a motivation to invest in it to "screw over the edge funds".
> How exactly are you arriving at your conclusion with any reason or logic behind it?
I explained my logic. Now that using social media to find and use over shorted stocks to make money has made its way to mainstream culture, fund managers will take this into account.
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I think the idea is that in the limit T->inf the profits go to zero.
That's not what the referenced definition of a "perfect" market says. Besides, who would run a business that could not make a profit?
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That's not what the referenced definition of a "perfect" market says. Besides, who would run a business that could not make a profit?
I've had this exact discussion with friends who study economics. The idea is that in a market with perfect flow of information (i.e. fairy land) then the profits tend to zero, I don't think this is a model for much of the real world if any.
That makes as much sense as people working for nothing. I don't see any explanation for profits tending to zero, either.
I wonder why "perfect" markets are even a thing. It has no applicability to actual markets. It offers no insight on actual markets, and offers no useful predictions about markets. It's about as useful a model as the Monopoly game is - i.e. none.
I've seen many people claim that a "perfect" market is a requirement for free markets to work well. This isn't remotely true. "Perfect" markets and free markets have nothing in common.
"Perfect" markets just seem to be a strawman put forth by people who argue that since "perfect" markets are unachievable, therefore free markets are no good.
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This is correct. More generally, there is absolutely no evidence that wealthier people do, on average, "leverage" technologies better. Ancient Rome is one example because while advanced technology existed, the wealthiest people were land owners taking in the profits of slave labor, not the architects and inventors who built temples and refined concrete. Of course, the same is true for modern society. Even so-called "…
> The wealthiest [Romans] were land owners taking in the profits of slave labor Not exactly. Crassus amassed his fortune first through conquest, and then through real estate speculation. Caesar and Pompey's fortunes were a mixture of family wealth and the spoils of war. There was certainly a class of wealthy Romans that derived their wealth -- and Rome's food supply! -- from land worked by slaves (mostly captured in…
It was through gaining ownership of land and by capturing slaves.
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> What kind of technology enabled wealth gap in feudal society? In short: Weapons. On the pre-gunpowder battlefield, the mounted, armored knight was roughly equivalent to the modern light tank. It is incredibly hard to take out an armored knight with the kind of weapons or tools which would have been available to peasants or serfs, so it doesn't take that many knights to keep enough peasants in-line to build a very w…
Following this reasoning, why didn't the enlightenment occur in asia, which had earlier access to gunpowder? Iirc the ottoman empire had portable guns before the west. And china had fire lances way before that.
Industry to make gunpowder cheaply and reliably rather than as one-offs for anti-castle siege weapons, and metallurgy and tooling to make the weapons hand-held and not prone to exploding in the operator’s hand, are what I have to assume old Asia lacked.
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> Simply by demanding that peasants/serfs pay taxes and conduct all commerce in the coin Just tell the peasants you're the hand of the god, and the god wants you to give their cows and grain to you. I think that worked pretty well for a looong time.
> Just tell the peasants you're the hand of the god, and the god wants you to give their cows and grain to you. I think that worked pretty well for a looong time. It did, until it didn't and you can read all about peasant revolts in a book all you want, which led to things like the Magna Carta. But I lived in Italy and worked on a farm that sprawled for many KMs in what was a feudal lord's manor and it was baffling j…