Night of the Living ComCap Debate....

[Berzerker]

Kid -

Since we're on the subject of productivity improvements and consumer spending, consumer spending is independent of productivity improvements.

Did consumer spending go up or down with productivity improvements in computers? The aggregate went up, but individual consumers spent less than early buyers. Reducing the cost of a product thru a production gain does affect consumer spending.

There is no tendecy for new consumer goods and services to be introduced to the market at the same time as the productivity improvements to clear the labor market. That is the cause of depressions.

The Great Depression was caused by monetary policy - government.

In the case of the automobile it created productivity gains and increased consumer spending.

And increased employment (which refutes your position). But didn't you just contradict yourself? You said consumer spending was independent of productivity improvements, now you're saying a productivity gain was met by increased consumer spending.

Unfortunately Henry Ford began building more cars than could be afforded or desired in the market. That's when capitalism takes a big hit, a period where no new spending is occuring and productivity gains are cutting into employment.

The productivity gain created the employment in the first place. That's like saying a production gain killed jobs because it created 10 jobs only to lose 3 of those jobs due to cutbacks in demand.

[Kidicious]

Originally posted by Berzerker
Kid -
Did consumer spending go up or down with productivity improvements in computers?

The productivity gains in producing the computers has weakened demand in the production of computers (job loss). Productivity gains in the auto industry are still occuring and also contributing to job loss. Also a factor is that the market is saturated now. That's why the prices are so low. They start off at a high price to see who will pay. Then as they saturate the market they bring the prices down.

Originally posted by Berzerker
Reducing the cost of a product thru a production gain does affect consumer spending.

On goods they already have?

Originally posted by Berzerker
The Great Depression was caused by monetary policy - government.

Nonsense, I'm giving you the cause here. Monetary policy can't cause long run cycle like that. It's just used to fine tune the economy.

Originally posted by Berzerker
But didn't you just contradict yourself? You said consumer spending was independent of productivity improvements, now you're saying a productivity gain was met by increased consumer spending.

Look closer. That's no contradiction.

Originally posted by Berzerker
That's like saying a production gain killed jobs because it created 10 jobs only to lose 3 of those jobs due to cutbacks in demand.

Productivity gains do not create any jobs at all.

[Berzerker]

Kid -

The productivity gains in producing the computers has weakened demand in the production of computers (job loss).

You mean there are fewer people making computers than, say, 15 or 20 years ago?

Productivity gains in the auto industry are still occuring and also contributing to job loss. Also a factor is that the market is saturated now. That's why the prices are so low. They start off at a high price to see who will pay. Then as they saturate the market they bring the prices down.

Kid, you aren't listening. Those jobs that are lost WERE CREATED by the production gain along with many more. You're still arguing that a production gain causes unemployment if at some point in time after the gain, the economy loses some of the jobs that were created by the gain. What if this job loss never occured because the marketeers were more savvy about saturation? The net job creation would still be positive...

On goods they already have?

No, on goods they would buy if a production gain lowered the cost of the product. And then businesses would have to increase employment to match the growing demand resulting from the production gain.

Nonsense, I'm giving you the cause here. Monetary policy can't cause long run cycle like that. It's just used to fine tune the economy.

What caused the financial collapse of the USSR? That was quite a depression, wouldn't you say? It's funny, the Federal Reserve was created shortly before the Depression to "fine tune" the economy. The Fed had a loose fiscal policy during the Roaring Twenties and then tightened money by a 1/3 (that's what some of the econo types at apolyton say anyway). Then there were all those countries manipulating the value of their currency to gain marketshare - monetary policy.

Look closer. That's no contradiction.

I did, still looks like a contradiction.

Productivity gains do not create any jobs at all.

Repeating your position as a "rebuttal" won't cut it.

[Berzerker]

Kid -

You're confused about what a productivity gain actually is. A productivity gain requires less labor by definition. Freed up labor is not the same as job creation.

It is if that freed up labor finds work at new jobs created by the productivity gain. Look at all the jobs that now exist because someone invented the automobile.

Demand must be stimulated, and eventually more and more new products and services must be introduced to suck up the ever increasing surplus of labor 'freed up' by the productivity gains.

Demand doesn't need stimulation, people consume because that's our nature. But that's how an economy expands, a productivity gain comes along reducing employment in one area while creating new areas to fill.

[Kidicious]

Originally posted by Berzerker
Kid -
You mean there are fewer people making computers than, say, 15 or 20 years ago?

Maybe, maybe it's closer to 10 years. The point is that as time goes by there will be job losses.

Originally posted by Berzerker
Kid, you aren't listening. Those jobs that are lost WERE CREATED by the production gain along with many more.

I'm listening, but you're not making any connections.

Originally posted by Berzerker
You're still arguing that a production gain causes unemployment if at some point in time after the gain, the economy loses some of the jobs that were created by the gain.

Continuing productivity gains cause continuing job loss. That's what I'm saying.

Originally posted by Berzerker
What if this job loss never occured because the marketeers were more savvy about saturation? The net job creation would still be positive...

They lower their price because they want to make profit. If they didn't they would lose sales.

Originally posted by Berzerker
No, on goods they would buy if a production gain lowered the cost of the product. And then businesses would have to increase employment to match the growing demand resulting from the production gain.

The Law of Diminishing Utility refutes what you are saying. At some point you would have to pay consumers to take the products, because they would get negative utility.

Originally posted by Berzerker
It's funny, the Federal Reserve was created shortly before the Depression to "fine tune" the economy. The Fed had a loose fiscal policy during the Roaring Twenties and then tightened money by a 1/3 (that's what some of the econo types at apolyton say anyway). Then there were all those countries manipulating the value of their currency to gain marketshare - monetary policy.

Prices were falling and the market was becoming saturated regardless of the monetary policy. At best the Fed could have delayed the enevitable. There is no way they could have prevented deflation.

[Kidicious]

Originally posted by Berzerker
Demand doesn't need stimulation, people consume because that's our nature.

Why don't you eat 20 candy bars a day? You must have the money to do it. People don't just consume more because it's our nature. It's a utility decision and our utility for consuming more goods and services diminishes as we consume more.

[Ogie Oglethorpe]

Originally posted by Kidicious


I have? I thought I was getting pissed off and rude. But atleast I know I was pissing off some of you guys.

Well at least then I know I'm doing my job. If it pisses you off you (at least subconsciously) know who is winning. Lol...

[Ogie Oglethorpe]

Originally posted by Kidicious
I'm I right in assuming that you guys think that new technologies that create productivity gains require more labor to produce the same goods?

No Kid it opens up new avenues and new otherwise existing markets that would not have been.

You naturally assume that productivity mean simply layoffs. What it really means is a better opportunity for product/service distribution and hence allows subsequent industries/markets to feed off of it.

Of course I'll assume the standard pessimistic arguement from you indicating that at some point the innovation and implementation of innovation will dry up and we'll simply reap layoffs and no new market creation.

[Velociryx]

Looks like Kid's trying to claim the job losses caused by innovation without acknowledging all the job creation that goes hand in hand with that.

Can't say I blame him for turning a blind eye to it tho, since it TOTALLY destroys his position, but :: shrug ::

Anyway, sorry I haven't been active the last little bit....been exploiting my friends and moving heavy stuff all day....

-=Vel=-

[Kidicious]

Originally posted by Ogie Oglethorpe
Well at least then I know I'm doing my job. If it pisses you off you (at least subconsciously) know who is winning. Lol...

No, what pisses me off is all the defensiveness about a system that chews people up and spits them out. People die and lose their economic livelihood every year, because of capitalism, and what I see is the winners who only have an argument that it benefits them, and they just turn a blind eye on the suffering and death.

What pisses you off is that I'm saying that the American Dream is just a pipe dream.

[Kidicious]

Originally posted by Velociryx
Looks like Kid's trying to claim the job losses caused by innovation without acknowledging all the job creation that goes hand in hand with that.

Atleast Berzerker is trying to explain the connection that you are claiming between productivity gains and consumer spending. You just blindly believe in it and expect everyone else too. Some of us do question things we read you know.

[Velociryx]

Ahhh, but the thing that Berserker is trying to make you understand is so blindingly obvious that it ought not require explanation at all.

It's perfectly reasonable to question stuff, but your argument goes well beyond that. While you gleefully point to the job loss that new technology creates, you blissfully ignore all the new jobs that it creates (jobs that historically have far, far outstripped the number of jobs they destroy--unless you'd care to attempt to argue that there are fewer total jobs in today's economy than there were fifty years ago.

As for defending a system that chews people up and spits them out, are you actually trying to argue that communism is any better?

Yes, I suppose if you choose not to look at all the purges, the death squads, the depressingly long lines to get even basic goods and services....take all that away, and sure! Communism is lots better!

It's also lots better on paper, but that's the rub....we don't live "on paper."

Too tired to type more....having hauled heavy $hit all day, my back is killing me. Gonna pop a couple Doan's (made in factories where the workers were exploited, of course), and relax with the heating pad (also brought to me by slave labor )

'nite.

-=Vel=-

[Kidicious]

Originally posted by Velociryx
While you gleefully point to the job loss that new technology creates, you blissfully ignore all the new jobs that it creates (jobs that historically have far, far outstripped the number of jobs they destroy--unless you'd care to attempt to argue that there are fewer total jobs in today's economy than there were fifty years ago.

BY DEFINITION PRODUCTIVITY IMPROVEMENTS DO NOT CREATE JOBS!

[Sava]

BY DEFINITION PRODUCTIVITY IMPROVEMENTS DO NOT CREATE JOBS!

Correct. They free up the labor pool in order to expand industry.

[Berzerker]

Kid -

Why don't you eat 20 candy bars a day?

Because I factor in other aspects of life, like health, to moderate my desire to consume.

People don't just consume more because it's our nature.

You've said nothing to refute me, you're just repeating your argument again. And please don't try to change what I said, you're adding the word "more" in there when all I said was that consumption is natural; hell, it's hardwired... we can't survive without consuming.

It's a utility decision and our utility for consuming more goods and services diminishes as we consume more.

And this means consuming is not natural?

Maybe, maybe it's closer to 10 years. The point is that as time goes by there will be job losses.

Kid, the very notion that there are fewer people making computers today than 20, 15, or 10 years ago is ludicrous. But feel free to offer up some statistics to prove your argument. And you're still arguing that job creation from a productivity gain should be ignored and we should only focus on job loss.
If I invent a way to reduce the cost and labor to make a car, you want to look only at the potential lost jobs of car makers and ignore the jobs created by the demand for my invention.
You're so wedded to your argument you barely acknowledged that the invention of the automobile MAY have resulted in more jobs even though jobs making horse buggies were lost...

Continuing productivity gains cause continuing job loss. That's what I'm saying.

We know what you're saying, we are merely pointing out that productivity gains can and usually do create jobs in new areas of the economy. You acknowledged this with the automobile example, so why continue with the same argument refuted by that example?

They lower their price because they want to make profit. If they didn't they would lose sales.

You didn't answer my question...again...

The Law of Diminishing Utility refutes what you are saying.

Feel free to state that law and explain how it refutes what I'm saying. Your response is basicly this, "the law, blah blah blah refutes your position".

At some point you would have to pay consumers to take the products, because they would get negative utility.

What does this have to do with the fact that a productivity gain that results in lower prices on computers will spur consumption of computers leading to more jobs making computers? Please stick to what we are debating until the current issue is resolved before jumping ship.

Prices were falling and the market was becoming saturated regardless of the monetary policy. At best the Fed could have delayed the enevitable. There is no way they could have prevented deflation.

Sorry, but making predictions about what might have happened and ignoring what did happen isn't convincing. The depression was caused by monetary policy here in the US, and abroad where trading partners were trying to devalue their currencies to attract marketshare... The tariff war sure didn't help either, but that too was the government meddling in the economy.

[Berzerker]

Sava -

Correct. They free up the labor pool in order to expand industry.

And the expansion of industry allowed by productivity gains means creating jobs, thank you.

[Sava]

Berz, but you would be in err if you said that productivity gains produced jobs in that specific industry. There are other factors to consider... such as the marketplace. Productivity gains would kill jobs big-time if the market became over-saturated.

[Velociryx]

Essentially, what Kid is saying is this:

The advent and invention of the productivity improver called the "Personal Computer" caused people to lose their jobs.

And he is right.

What he is not acknowledging is that same invention....the "Personal Computer" created FAR more jobs than it caused to be lost in the marketplace (we need factories to make PC's, there's a HUGE market for peripherals, and let's not forget software).

According to Kid, we can't count these created jobs in our equation. Since we can't count them, they "don't exist" in the World According to Kid.

Nope.

No one has a job making computers, printers, or other peripherals.

No one has a job servicing that equipment.

No one has a job in the PC software market (including games).

These things simply fall from the sky like mana from heaven, because as we all know, our economy has been shedding 1.2 million jobs a month for "a very long time" now....

-=Vel=-

[chequita guevara]

Originally posted by Meldor
I will grant that I am not a perfect Russian scholar but I would contend that at the end of Alexander II reign that Russia was on par with the rest of the world.

Well then, you'd be very, very wrong.

It was during the time of Alexander III, that the revolts in Russia began. Russia stayed in turmoil until after WWI in 1920. It was the party of Lenin (among others) that kept them in that constant state of revolution and war.

Russia had plenty of revolts. There were the Decembrists in 1821, the Narodniks from the 1860s to the 1880s. The 1905 Revolution was sparked by the stupidity of the Tsar's officers gunning down a protest march led by a police agent. The Bolsheviks and Mensheviks took advantage of the situation, but they hardly caused it. After the November Revolution in 1917, it was the Whites that kept the Russians in a constant state of war, unless you blame the revolution for defending itself.

My comments were directed at the Soviet Union post WWII when they did in fact become the "Evil Emmpire" to the Western world. It is no secret that Stalin had Hitler-like ideas of world domination.

That remains to be proven. Stalin's plans for world domination included the sabotaging of the revolutions in Spain and Italy and Greece as well as trying to pull the rug out from under the Chinese Communists. Stalin killed more revolutions (not to mention revolutionaries) than anyone except the United States. Despite it being "common knowledge," you need to prove that Stalin was attempting to dominate the world.

It is that which the west opposed. Not the revolution in Russia or the new parties.

Then why did the Allied forces execute Bolsheviks whereever they landed? Why did they pump money and arms to the White generals.

As for the invasion with multiparties still alive in Russia, lets see....It was on March 3rd 1918 that the Russians admitted defeat and surrendered to the German alliance in the Treaty of Brest-Litovsk, giving up a large chunk of territory and stabbing the allies in the back at the same time.

Should the have continued fighting? With what army? The Russian Army disintigrated. The Bolsheviks surrendered because they had no choice. They negotiated with the Germans, full peace, no annexations, but the Germans would have none of it, so the Bolsheviks declared peace on the Germans. Unfortunately, that doesn't work when the other side is unwilling. When you are defeated, youare defeated. Russia should have left the war in 1917, it certainly would have gotten a better peace, but the Allies bribed Kerensky to stay in the war even as his armies were deserting. It was a collossal failure. Kerensky might have held onto his government had he heeded Bolshevik demenads for peace.

In the later part of that month the English were forced to land at Murmansk to protect supplies (given to Russia by the English, French and Americans) from falling into the German hands and helping the German war effort.

Yes, because Murmanks was so close to German lines? And the allies immediately preceded to execute all the Bolshviks they could lay their hands on and turned over local power to the White Armies. In April they bribed the Czech guards to revolt against the new government by promsing them a new Czech state if they did. That was the begining of the civil war which lasted three years and killed nine million Russians.

Seven days later (July 17) Nicholas II and his entire family were murdered.

Let's have a pity-party for the butchers of Russia. Awwwww. The blood of millions was on their hands, but ooooh, those mean old Bolsheviks executed them.

The next month the US took Vladivostok and a month later landed at Archangelsk.

The US didn't land until 1919. There are pictures of US soldiers executing Bolsheviks.

Even the French landing near the end of WWI could hardly be called "in support of the Tsars, as the line was dead and gone before then.

There are still Romanovs today. The line was not dead and gone, and Denekin and Wrangel received quite a bit of support from the French. In all, the armies of fourteen different countries invaded Soviet Russia to try and grab territory or overthrown the Bolsheviks.

That is were they obtained a lot of the technology and industrial base that they used after the war.

If their technology soley came from abroad, then how was it their tanks were far superior to American tanks, and their support aricraft the best in the world?

For the second part, the technology that they (and the US for that matter) used to put both the satellite and the first man is space was obtained from the Germans post WWII.

But the US got the better German scientists.

Stagnation.

I never argued that they didn't stagnate. I argued that the "inferiority" of the system was hardly apparent during the Cold War, let alone at the outset of the Revolution. Your assertion was that the communist system was opposed for its obvious inferiority.

Tell that to the family of Tsar Nicholas II.

I don't give a damn about them, anymore than I suppose you give a damn about the execution of the wives or mistresses of Mussolini or Ceaucescu.

Tell that to the victims of the October revolt.

The only victims of that revolt were the Bolsheviks who were murdered by White Guards in Moscow. Five hundred Red Guards surrendered to the Whites, knowing that a relief force was on the way to Moscow and would take back the city. Rather than shed blood, they surrenedered, and were all executed. The Whites in turn surrended to the relief force, who granted them amnesty.

Tell that to the Menshiveks.

Which Menshivks? The ones that joined the Communist Party or the ones that joined the White Guards.

Tell that to the followers of Kolchak.

Tell that to the White Army soldiers who followed the butcher Kolchak and murdered millions. Hmmmm? Nope, don't care about there fate.

Stalin might have been the worst, but Lenin was no angel.

As he only ruled during wartime, and a near genocidal war on the part of one side, its hard to blame Lenin for taking harsh measures to defend the revolution. Or do you claim Lincoln was a tyrant?

Which was it, did they turn a blind eye or support him?

You think it couldn't be both at different times and by different parties? The US government turned a blind eye while capitalists like Ford and Hearst actively aided Hitler.

The Nazi party crushed all of the parties in Germany not just the ones you are concerned with.

The Conservative Party was never banned and still had members in the Reichstaag, even after the 1937 elections. IIRC, the Peasants Party did as well. Bascially, any party which didn't oppose the Nazis was still legal.

The Western powers (England and France) didn't stand by and watch just because Hitler opposed Russia.

When Italy stood up when Hitler attempted the Anschuss in 1936, Hitler backed down. All France or England had to do was bark, and Hitler would have stood down. They could have sent aid to the Republican government in Spain, even as a majority in both countries (and the US as well) was in favor of aiding them, though not going to war. Money and arms could have saved Spain from fascism, but since the Republicans were on the same side as the communist and anarchist forces in Spain, and aided by the Russians, the Western powers let Germany and Italy walk all over them, not even lifting a finger when the Germans bombed Guernica.

Lenin himself had designs on a lot of Eastern Europe and parts of Turkey.

You have evidence of these designs?

When Finland and the Baltic states broke away, the Soviets recognized their governments, and even let them fall to White governments. When the Ukraine declared independence in 1917, the Soviets recognized it. They allowed Poland to be created. They only went to war with Poland because poland invaded! They let Romania grab a peice of their territory. The only territory that was foreably annexed was the Transcaucasian Republic, which was Stalin's doing, which started a political fight between Stalin and Lenin, which was hampered on Lenin's part by his strokes. Turkey actually grabbed a piece of the Transcaucasian Republic first, and the USSR never demanded its return.

So please, explain these "designs."

[chequita guevara]

Originally posted by Sava
Correct. They free up the labor pool in order to expand industry.

There's always slack in the labor pool. They do free up labor, but not "in order to expand industry." Greater productivity, however, does tend to lead to expanded industry.

[Kidicious]

Originally posted by Berzerker
Kid -
Because I factor in other aspects of life, like health, to moderate my desire to consume.

Forget about your health for a moment. Go to the store on the corner and by one candybar at a time and eat them one at a time. Then come back and tell me how many you ate until they didn't taste good anymore.

Originally posted by Berzerker
You've said nothing to refute me, you're just repeating your argument again. And please don't try to change what I said, you're adding the word "more" in there when all I said was that consumption is natural; hell, it's hardwired... we can't survive without consuming.

I'm trying to teach you one of the most fundamental laws of economics, the Law of Diminishing Utility. There is no argument. It's a law.

Originally posted by Berzerker
And this means consuming is not natural?

Consuming infinite quantities is not possible. It has nothing to do with nature.

Originally posted by Berzerker
If I invent a way to reduce the cost and labor to make a car, you want to look only at the potential lost jobs of car makers and ignore the jobs created by the demand for my invention.

Jobs are only created if you market a new product or service. If you market it as a new business product or service you aren't creating jobs, because businesses will only buy it if it saves them labor costs.

Originally posted by Berzerker
Feel free to state that law and explain how it refutes what I'm saying. Your response is basicly this, "the law, blah blah blah refutes your position".

:sigh: I already gave you the law. Think about the candy bars or go back through the thread.

Originally posted by Berzerker
What does this have to do with the fact that a productivity gain that results in lower prices on computers will spur consumption of computers leading to more jobs making computers? Please stick to what we are debating until the current issue is resolved before jumping ship.

Oh Boy. Lower prices don't encourage more production higher prices do.

Berzerker, are you considering productivity gains in one industry? There are productivities gains going on everywhere in the economy these days. There is no way we could consume all of the goods and services that would be produced at the productivity level at full employment.

[chequita guevara]

Kid, why haven't you joined the Communist Party of Apolyton yet?

[Kidicious]

Originally posted by Velociryx
Essentially, what Kid is saying is this:

You either have no idea what I'm saying or you are playing games again.

The computer is both a consumer product and a business product. Computers as business products eliminate jobs. Computers as consumer products create jobs. The thing is that computers are used to make computers. So as the market for computers becomes saturated businesses start downsizing. That's why you always need new products coming out to get people to spend money. They just don't spend money if they get no utility. Again, people are rational. They aren't just going to keep buying things. They have to get something of equal value in return.

[Kidicious]

Originally posted by chegitz guevara
Kid, why haven't you joined the Communist Party of Apolyton yet?

No one has invited me yet. Where do I sign up?

[chequita guevara]

Just put the party name in your location or signature and you're set.

[Kidicious]

Originally posted by chegitz guevara
Just put the party name in your location or signature and you're set.

Oh, right.

[Kidicious]

Berzerker,

The Law of Diminishing Utility states that each additional unit of consumption gives the consumer less utility. Therefore they will only buy additional products for less money, and eventually they will not purchase anymore at any price.

[Berzerker]

Sava -

Berz, but you would be in err if you said that productivity gains produced jobs in that specific industry. There are other factors to consider... such as the marketplace. Productivity gains would kill jobs big-time if the market became over-saturated.

You have erred by not reading the thread. I have repeatedly pointed out that the invention and production of the automobile undoubtedly reduced employment among buggy horse makers, but it did create lots of jobs in the auto and related industries as well as opening a multitude of areas for future employment. As for killing jobs, those would be from the jobs created in the first place by the production gain. Yeah, if I invent a widget and a bunch of people want my product, I'll have to employ alot of people. If the market becomes satisfied and my product isn't bought as much, I'll have to lay off some people or seek other products for them to make.

chegitz -

There's always slack in the labor pool. They do free up labor, but not "in order to expand industry." Greater productivity, however, does tend to lead to expanded industry.

Yeah, there's that evil "selfishness" making life better for more people. But "tend"? Does lower productivity lead to expanded industry?

Kid -

The Law of Diminishing Utility states that each additional unit of consumption gives the consumer less utility. Therefore they will only buy additional products for less money, and eventually they will not purchase anymore at any price.

I asked you to use that law to explain how it refutes my argument.

Forget about your health for a moment.

Ahem...why?

Go to the store on the corner and by one candybar at a time and eat them one at a time. Then come back and tell me how many you ate until they didn't taste good anymore.

Why do I have to consume more than what I want? How is this proof my desire to consume isn't natural? Can you actually answer me instead of inventing more strawmen?

I'm trying to teach you one of the most fundamental laws of economics, the Law of Diminishing Utility. There is no argument. It's a law.

First, this "response" has nothing to do with what you quoted from my post. Second, you aren't "teaching" anything, all you've done is cite some law and didn't even bother to explain how the law refutes anything I said.

Consuming infinite quantities is not possible. It has nothing to do with nature.

So what? Did I say it was natural for people to consume candy until they're sick to their stomachs (well, aside from kids on Halloween)? Did I say it was natural to consume infinite quantities? No, but that was your response to my argument that consumption is natural. So, show us how consumption isn't natural by sitting on your butt until you die of starvation. Oops, I forgot, you'd still be consuming air and space...never mind...

Jobs are only created if you market a new product or service. If you market it as a new business product or service you aren't creating jobs, because businesses will only buy it if it saves them labor costs.

*sigh* And how will those businesses buy that new product from me if I don't employ people to produce it? I have to employ people, and businesses I need to help me make my product will also employ people. But you want to ignore all these jobs and look only at the jobs lost in one sector of the economy. Why?

:sigh: I already gave you the law. Think about the candy bars or go back through the thread.

But you haven't explained how the law effects my proposition that consuming is natural. Fact - we consume. Fact - we consume because nature requires life forms to consume to live. Fact - consumption is natural. Now, how does this "law" refute these facts?

Oh Boy. Lower prices don't encourage more production higher prices do.

Lower prices encourage people who couldn't afford a desired product to buy, THAT encourages more production. How many computers were produced 25 years ago when computers were really expensive? And now with lower prices? Very few people could afford computers and very few people were involved making computers. Innovations and the subsequent drop in labor costs reduced the cost of computers so millions could afford them. So how did computer makers meet the growing demand? Employing more people to make computers.

Berzerker, are you considering productivity gains in one industry?There are productivities gains going on everywhere in the economy these days.

My God, Kid, what do you think I've been asking you to consider all this time? I've been asking you to add in all the jobs created in other sectors of the economy as a result of a production gain in one sector when computing the gain or loss in employment...

There is no way we could consume all of the goods and services that would be produced at the productivity level at full employment.

First, at full employment, we'd have more consumers with money to spend. But I've already explained that your "saturation" argument is irrelevant. Before the innovation and production gain, the product didn't even exist and you're worried about saturation? Thanks to the production gains in making computers, millions have jobs making and selling computers or consumers who've increased their output because of the product. Why do you think we've seen an explosion in technological advancement over the last 150 years? It ain't because of communism...

[Kidicious]

Originally posted by Berzerker
Kid -

I asked you to use that law to explain how it refutes my argument.

Consumers only spend a little bit of their additional income at the cheaper price because they stop getting utility.

Originally posted by Berzerker
Why do I have to consume more than what I want? How is this proof my desire to consume isn't natural? Can you actually answer me instead of inventing more strawmen?

What the.... !? I'm trying to demonstrate the law for you. It doesn't matter how cheap the candy bars are, You will stop eating them.

Originally posted by Berzerker
*sigh* And how will those businesses buy that new product from me if I don't employ people to produce it? I have to employ people, and businesses I need to help me make my product will also employ people. But you want to ignore all these jobs and look only at the jobs lost in one sector of the economy. Why?

We're going around in circles. You want to add the labor required to make the business good to the total number of jobs and say that jobs are created. When you add those jobs there is a net job loss. That's why it's a productivity gain. Again, a productivity gain is producing the same good with less labor, even when you add the labor required to make the business equipment.

Originally posted by Berzerker
But you haven't explained how the law effects my proposition that consuming is natural. Fact - we consume. Fact - we consume because nature requires life forms to consume to live. Fact - consumption is natural. Now, how does this "law" refute these facts?

It doesn't. I don't know how you got onto this thing about natural consumption. If it weren't natural to consume there would be no economy, but that doesn't mean that people just consume eveything.

Originally posted by Berzerker
Lower prices encourage people who couldn't afford a desired product to buy, THAT encourages more production. How many computers were produced 25 years ago when computers were really expensive? And now with lower prices? Very few people could afford computers and very few people were involved making computers. Innovations and the subsequent drop in labor costs reduced the cost of computers so millions could afford them. So how did computer makers meet the growing demand? Employing more people to make computers.

Sure, but productivity improvements and market saturation cut those jobs. As time goes by more and more are cut.

Originally posted by Berzerker
My God, Kid, what do you think I've been asking you to consider all this time? I've been asking you to add in all the jobs created in other sectors of the economy as a result of a production gain in one sector when computing the gain or loss in employment...

Well that didn't help. I'll see if I can think of another way to explain it to you at work.

Originally posted by Berzerker
First, at full employment, we'd have more consumers with money to spend.

You're saying that the new employees would only produce enough for themselves. They would be producing much more than that. It's an impossibility, and that's why we have permanent unemployment.

[Ogie Oglethorpe]

Originally posted by Kidicious

Consumers only spend a little bit of their additional income at the cheaper price because they stop getting utility.

What the.... !? I'm trying to demonstrate the law for you. It doesn't matter how cheap the candy bars are, You will stop eating them.

Good for you Kid you understand the basic concept of Econ 101 Micro economics.

You have failed in every arguement put forward though to reconciel the fact that new industries and markets are created from technological advances.

Given your candy bar analysis. At some point candy bars become so cheap that they become a viable feed media for livestock. Bingo new market and bingo new demand.

A more apprapo example given via Vel. The productivity and technologicla advances of the PC have given rise to new networking, new software, new periperals that couldn't have been available to the general public.

You want to live and die by Law of Diminishing Utility fine stick to commodities products. Problem is the law of diminishing utility only addresses a specific time slice. Tomatoes today run $2.00 a dozen. Demand is appropriate to the demand curve. The curve flattens as the price decreases. Situations and demand is not a fixed function tho. It is a function of time and market situations.

I suggest you bone up on your econ.

Ohh and by the by stop confusing demand. You keep refering to business and consumer. Demand is demand and reflects the wants of government, private sector business as well as the individual consumer.