Oh well done Ritchie

What is more, markets only work when no one participant can influence pricing

That Tesco can change the price of its own brand baked beans by 1 p means that markets do not work.

Myself, I think that\’s a rather strong claim. Strong to the point of lunacy, obviously.

The actual, real, claim from the economists is that a perfectly competitive market is one where no one player can influence the price. But the claim is not that this is necessary for markets to work. Even markets that are not perfectly competitive work….and work better, for much to most to nearly all of the time….than having no markets at all.

Let us just consider what Ritchie is actually claiming though. Influence over pries means that a market cannot work. Thus we must ban unions of course: for they exist in order to influence prices in the labour market. Thus the presence of unions means that markets cannot work: so we must ban unions.

Now I don\’t actually believe that to be the correct action: but it is an inevitable outcome of what Ritchie claims to believe.

8 comments on “Oh well done Ritchie

  1. This is even better-

    What is more, markets only work when no one participant can influence pricing but when some have 14 times more than the share of resources that would be allocated to them in an equal society – which by implication market theory assumes to exist – then the conditions for efficient markets don’t exist: the votes are unevenly distributed.

    I think he’s saying that a fair market can only exist if everyone’s income and wealth are precisely equal. “Resources that would be allocated to them”. Lol.

  2. Ritchie doesn’t believe in having markets. Isn’t he just trying to say so here in a convoluted way? He’s saying that no market with any participants can work, since it’s self-evident that to participate in a market is to influence pricing.

    It’s all part and parcel of Ritchie advocating old-fashioned Nazi policies. His views on markets and how they should be controlled are textbook Fascist economics.

  3. Is there a single economic concept that Ritchie actually understands?

    I seem to remember someone (Scott Burgess?) linking to an arts professor who said that supply & demand, and hence the market, didn’t work. His reasoning was “I demand a car at $100 but the market won’t supply it, ergo the market doesn’t work”.

    Ritchie’s thinking is very similar.

  4. Like Ian, my favourite bit is

    when some have 14 times more than the share of resources that would be allocated to them in an equal society

    Brilliant. It really is quite brilliant – it is a perfect summary of ritchienomics

    – an equal society is one where everyone has exactly the same
    – this is achieved by an overarching body allocating all the resources, which therefore
    – clearly has to not only exist, but has to own all the resources in the first place.

    it is important to remember that, much like, say, David Icke, he is only a joke for as long as he is denied the possibility of ever getting to implelemt his ideas.

  5. The feature of a voluntary market that he seems to ignore is the right to choose NOT to be one of the voluntary buyers or sellers.

    In one of his railings on job creation I suggested that he reduces his own income to £15k (after all, nobody needs any more than that) but he then hires a few long term unemployed from his local council estate or maybe some unemployed within Tax Research.

    Pointing out his current decision not to do so is part of the ‘willing buyer-willing seller’ thing.

    Needless to say, it didn’t get published.

  6. Sam (#4)

    And of course he will deny that implication of his comments – that an equal society is represented only when there is equality of result, and its historical precedent in the Soviet Union, due to his ignorance of history being possibly even greater than his ignorance of economics.

    For me even more impressive is:

    ‘There is, of course, an answer to this: it is more progressive taxation and it is wealth taxation. I made the case in a paper for the Class think tank. Observing inequality is not enough. Action to reduce it is required.’

    So we return to the period 1945 to 1979 ‘where everyone was more equal and as a result happier’ – a Fantasy Island view of British history.

    However, as you say, people on these pages might laugh a little less when he starts his role as principal economic advisor to the Miliband government…..

  7. But isn’t the point of markets that every participant influences the price?
    I buy baked beans from Tesco then they can afford to sell them a little more cheaply as they’ll be buying them in greater bulk/more frequently than everyone else that I didn’t buy the same thing from.
    Maybe I’ve studied as much economics as Ritchie.

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