From: Alejandro Agafonow (alejandro_agafonow@YAHOO.ES)
Date: Sat Apr 28 2007 - 16:26:40 EDT
Dear Friends,
The hostility of our statements has grown, don’t you think?
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Levy on 04/28/2007: […] why, in an oligopolistic market, should we support one huge corporation against another huge corporation? I think they've basically been taken in by Apple corporate propaganda.
In a natural oligopolistic market it is about aggregated preferences where your particular opinion could be statistically irrelevant. Of course, your worry could inspire new forms of carry good information to consumers so they can choose better. Nevertheless, we can expect people dissenting even in this case.
I think the Austrian economist Murray Rothbard (Man, Economy and State, Ludwig von Mises Institute 2004) was right when facing your statement:
If the consumers were really angry at this “monopolistic action,” they could easily make their demand curves elastic by boycotting the producer and/or by increasing their demands at the “competitive” production level. The fact that they do not do so signifies their satisfaction with the existing state of affairs and demonstrates that they, as well as the producer, benefit from the resulting voluntary exchanges. (pp. 634)
Cockshott on 04/27/2007: In the initial phase - up until the entry of Taiwan into the market, price information was altogether secondary as a means of communication. The primary mode of communication was magasinze like Byte and Dr Dobbs Journal. These disseminated the large quantity of technical information that was needed to evaluate different products. Price was altogether secondary since the products were not standardised enough for price by itself to have much meaning […]After IBM had produced a standard design which was then copied by clone manufactures -primarily in Asia but also US companies like Dell, price became important because the technical differences between the machines were minor. […]However even in the late stage, a major information channel was constituted by
standardisation bodies like VESA and the IEEE which specified the standards to which the products could be built. It is the existence of such standards that allows price to function as a communications medium at all. Without these information channels in the form of technical specifications passing between
companies in the US and their suppliers in China, prices would be useless as an indicator.
Paul seems to ask prices to carry a kind of information that anybody have stated they are capable to. Nor Austrians neither Market Socialists. Even more, in a market economy (socialist or capitalist) prices never lose their role as a means of communication, being this primary or secondary (according to the interpretation).
What information market gave Jobs & Wozniak to build Apple I? (1) approximately the price at which each computer would be sold; (2) the cost of the components they needed to build Apple I; (3) the cost of the skilled labour to build the machines; (4) approximately the time passed until the sale would be done; and (5) the rate of interest at which they could get a loan or the cost of compromising their own capital during the former period of time.
The story, according to Wikipedia, was as follow: the owner of The Byte Shop, Paul Terrel, offered to Jobs buy 50 machines at a price of $666.66. Then Jobs ordered from the Cramer Electronic the components and he and Wozniak were able to deliver the assembled machines on time to The Byte Shop and pay back to Cramer Electronic. The story reports the amazing of Terrel because the tenacity of Jobs, since Cramer Electronic called Terrel to confirm the purchase order Jobs reported.
The products standardization is at most a sign of an industry maturity. It can’t account: price stability, price level or rate of profit, since in a competitive economy the market power is expected to vary from time to time thanks to the entrepreneur action. Products standardization can’t either account the future viability of the industry due to new and better ways, discovered by a socialist or capitalist entrepreneur, to satisfy the same preferences. Products standardization becomes the primary means of communication in the context of an Evenly Rotating Economy. This kind of economy is the fiction depicted by neo-classics and the today feasible labour time accounting economy.
Murray Rothbard (Man, Economy and State, Ludwig von Mises Institute 2004) defines this sort of economy as follows:
Given values, technology, and resources, whatever their concrete form, remain constant. In that case, the economy tends toward a state of affairs in which it is evenly rotating, i.e., in which the same activities tend to be repeated in the same pattern over and over again. Rates of production of each good remain constant, all prices remain constant, total population remains constant, etc. Thus, if values, technology, and resources remain constant, we have two successive states of affairs: (a) the period of transition to an unchanging, evenly rotating economy, and (b) the unchanging round of the evenly rotating economy itself. (pp. 321)
The switch over of the relative market power, if it existed at all in the software/hardware industry, concerns the decade of 80’s. According to Wikipedia, Apple and IBM rivalry concerned the market segment of colleges, college students, and knowledge workers where IBM was strong. Whereas, Apple was strong in the segment home users and public schools.
Do you remember the advertisement of Appel, with the female action hero, when launching Macintosh? An illustrating tale of the situation is posted in Wikipedia:
The Apple Macintosh was launched in 1984 with a now famous Super Bowl advertisement based on George Orwell's novel 1984 and directed by Ridley Scott. Steve Jobs' intention with the ad was to equate Big Brother with the IBM PC and a nameless female action hero, portrayed by Anya Major, with the Apple Macintosh. The commercial ended with the following: "On January 24, Apple Computer will introduce Macintosh. And you'll see why 1984 won't be like '1984'" — the implication being that the Mac's new, "user friendly" GUI (with icons designed by graphic designer Susan Kare) would liberate computing and information from the IBM PC. [http://en.wikipedia.org/wiki/History_of_Apple_Computer]
Then, it could be the properly context of my question: Could price channel reliably report the revolutionary technological change emerging at that time?
Best regards,
Alejandro Agafonow
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