Thinking About The Economic Markets As Single Entities
•
by Lowell Kennedy
I do not pretend to subscribe to the notion that this is a war game. In fact, I have screamed down at that notion, figuratively of course. However, it should prove ironic that I could provide the strongest economic case for the game as such and propping up an otherwise shoddy argument by thinking about the economic markets as single entities.
Perhaps the single most important Constitutional case about sports is proceeding in the United States right now and few people know it. The NFL is pursuing broad antitrust protections by arguing the league is a single entity rather than a collection of competing teams. In lay man’s teams, the NFL wants you to believe it itself is the product and that there are 32 versions right now and that for the best interests of everyone, it should receive a monopoly. The 32 owners are not independent operators but invested stakeholders in the collective in such an argument. As much as I tend to disagree with such arguments in real life, I am intrigued if we can transpose them to this game.
I always tend to believe that the economic aspect of this game goes underappreciated. What’s worse is the dire lack of fresh, new, or inventive thoughts about economics. I guess that this is product of the stale study of economics itself and the little interest it provides for thought-provoking ideas. For example, a coordinated operation (like a commune) in this game could attempt to employ shift work. In beta, when you worked had an effect on your production. Transferring that idea: instead of opening two Q1 companies to employ (I’ll continue to use the commune example) party members, you could operate one Q2 with morning workers and evening workers. In general, the higher quality companies provide a larger profit margin. It would be necessary that people to overcome the stigma of being fired in such a case but now there’s no incentive for holding a job overnight. Their daily firings would be additional work but in the long run, it is possible if not probable for increased operating success of the company.
I apologize for straying off on a tangential idea regarding economics; now, I’ll return to the discussion of the economic markets as single entities. Without customization yet available, each market is simply divided by product, quality, and country. It is the quality market in a particular country that I am thinking of as the single entity. For example, the Q1 food market in South Korea, the Q3 grain market in the United States, or the Q5 weapons market in Poland. If we own a company in any of these markets, we like to view ourselves as independent operators and owners. And we are. However, we can also be viewed as franchises in the same ways the football teams of the NFL are. Within the structure, it appears that we simply compete against the other teams/companies in our markets. Yet that is not the case. The markets compete directly with one another. It has happened often and we don’t even realize it. When I go to the weapons market to buy guns, I’m looking at the costs/benefits of Q1 vs. Q3 often across many countries. If the Q1 weapons market is cheaper in America than Canada that market is winning so to speak. All members of that market will derive benefits when that is the case.
Thus, it is this view that company owners are stakeholders in the markets that they participate. No one pretended that the American iron markets were worth investment when there was no high iron region. Those markets simply could not compete against others.
I subscribe to this game being played as individuals and that often seems to come to blows that with those that want collective national action. What’s funny is that few people have argued or even discussed the ramifications if we think about economics in a similar way. Perhaps it is an argument of convenience that doesn’t help the owners of conglomerations that want us to fight in unison. Either way, it seems to be unique view that can, could, and maybe should spur discussion of economics.
Facebook
Twitter
Discord
Comments
Voted and subbed to comments hoping we get some interesting thoughts.
Nicely done, Lowell. I am one of the eRep 'warhawks,' but I think you made some great points and am also interested in the "when you work matters" concept.
Lt. Scheisskopf
http://www.erepublik.com/en/article/the-week-that-was-week-5-edition-1146107/1/20" target="_blank">http://www.erepublik.com/en/article/the-[..]/1/20
Very interesting idea and I applaud your ability to see the markets as one entity working together, like an organism so to speak. I look forward to continued articles.
Some would say you suggest industry act as a national cartel for the sake of price fixing in the national interest. Many would say eRep markets are too dynamic for such collective action to work effectively.
I guess it would depend on what the goal is behind your proposal. There might be easier ways to get there.
For example, wages are pretty low, the USD is at its all-time high, and prices are not that low. I'd like to see wages higher relative to prices.
IMO, lowering the USD will promote exports and generate more economic activity. The last time I checked, the Economic Council felt differently.
~hyuu~
Cool story bro.
There are a lot of Americans who see the NFL as a successful socialist venture. The league engages in profit sharing, which means the best team and the worst team get equal shares of TV revenue. Teams and players might be more popular, which means their jerseys sell more, but every team gets a share of the revenue generated from the companies making those jerseys.
Unfortunately for the NFL, after the 2010-2011 season, you can expect a players' walk-out, the collective bargaining agreement runs out, and typically when that happens, and a new one is not immediately agreed upon, the players strike and/or the owners lock them out.
As to your economic model, I agree that, worldwide, people buy what they need at the cheapest cost, period, because there's no difference in brand. There are going to be some who buy from a certain company because their buddies run it, but by and large, people just look on the list for that Q3 weapon they want and buy the cheapest. Some get a little more involved, shop from country to country to find even better bargains, and buy accordingly. As such, since there is no distinction in quality between a Q5 house made by a company in Poland or in Pakistan, and someone in Bolivia is going to buy a house for the cheapest price, it makes sense to think of the Q5 housing industry as a single worldwide market instead of sixty-odd national markets.
I see where you're going with this.
I like the subject but I have no problem with monopolies that are not inforced by law to begin with.
It seems though that you are arguing that NFL should not be considered a monopoly on the grounds that baseball exists and perhaps movies and even college college football. Fundamentally Monopolies compete with everyone elses choice to create a competitor or not. while there may be a large investment to starte a competitor or not they always compete with the threat.
It sounds like you started using reason but if you continue down those lines you simply erase the falicy of the idea of monopoly. Now you gotta think of a reason to stop thinking logically or think that the whole idea of busting monopolies is a big witch hunt.
I like the subject but I have no problem with monopolies that are not inforced by law to begin with.
It seems though that you are arguing that NFL should not be considered a monopoly on the grounds that baseball exists and perhaps movies and even college college football. Fundamentally Monopolies compete with everyone elses choice to create a competitor or not. while there may be a large investment to starte a competitor or not they always compete with the threat.
It sounds like you started using reason but if you continue down those lines you simply erase the falicy of the idea of monopoly. now you gotta think of a reason to stop thinking logically or think that the whole idea of busting monopolies is a big witch hunt.