PeakTrader.com

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PeakTrader:

The free market has always been here and will always be here. Life wouldn’t exist without the free market.

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Although, I disagree with much of Austrian economics, I agree, the free market is a “miracle.” An article by an Austrian economist:

Giving Thanks for Capitalism, The Invisible Hand, The Miracle of the Market, and No Turkey Czars

Like in previous years, you probably didn’t call your local supermarket ahead of time and order your Thanksgiving turkey this year. Why not? Because you automatically assumed that a turkey would be there when you showed up, and it probably was there when you showed up “unannounced” at your local grocery store to select your bird.

Why was your Thanksgiving turkey waiting for you without an advance order? Because of “spontaneous order,” “self-interest,” and the “invisible hand” of the free market – “the mysterious power that leads innumerable people, each working for his own gain, to promote ends that benefit many.” And even if your turkey appeared in your local grocery stores only because of the “selfishness” or “corporate greed” of thousands of commercial turkey farmers, truckers, and supermarket owners who are complete strangers to you and your family, it’s still part of the miracle of the marketplace where “individually selfish decisions lead to collectively efficient outcomes.”

“The activities of countless far-flung men and women over the course of many months had to be intricately choreographed and precisely timed, so that when you showed up to buy a fresh Thanksgiving turkey, there would be one — or more likely, a few dozen — waiting. The level of coordination that was required to pull it off is mind-boggling. But what is even more mind-boggling is this: No one coordinated it.

No turkey czar sat in a command post somewhere, consulting a master plan and issuing orders. No one forced people to cooperate for your benefit. And yet they did cooperate. When you arrived at the supermarket, your turkey was there. You didn’t have to do anything but show up to buy it. If that isn’t a miracle, what should we call it?”

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Bruce, even plants and animals benefited, or more accurately, survived, because of the “free market.”

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Tzimiskes, I think, the free market is efficient, dynamic, and robust. It’s the foundation of economics. The power of the free market can be redirected to improve the lives of more people rather than trying to “crowd out” the free market (I’m sure, there’s some free enterprise even in North Korea). The free market works best when everyone has perfect information.

I wonder if sometime in the future when everyone is worth at least a million dollars in today’s dollars or makes at least a million dollars a year, if they will still be talking about income or wealth inequality, because someone else is worth or makes a trillion dollars.

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Noony, yes, prices are higher than they’d otherwise be in highly regulated industries, like U.S. health care. Fortunately, you didn’t have a serious health problem in Canada. And, the average house in Canada is much smaller than the average house in the U.S. in square feet (that’s one way to save money on heating, even in a country with lots of space, like Canada).

Perhaps, you need more lighting where you live and spend a little more on electricity. 401(k)s in the long run are much higher, because Corporate America has been very competitive on a global scale.

And if you drive a smaller and cheaper car, than you could in the U.S., your car insurance could be cheaper.

You’re more stable in Canada, because you’re more static. Of course, if you lived in San Francisco or New York before moving to Canada, it’s cheaper. Maybe, you should’ve retired to the Rocky Mountain West, like Utah

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Also, it should be noted, Canadians tend to buy houses when they’re much older, because of stricter lending standards (and enjoy homeownership over fewer years), pay more to banks (which prevent banking crises, and Canadian banks take less risk than U.S. banks), home prices are much higher, and square feet is much lower. Furthermore, Canadians cannot deduct mortgage interest.

So, Canadians pay much more and get much less than Americans, and Canadian banks benefit enormously. Perhaps, somewhat similar to Canadian health care.

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According to the Canadian Homebuilders Association the average size of a new house in Canada is “about 1,900 square feet,” and “expect them to get smaller.”

http://www.chba.ca/uploads/pulse%20survey%20results/main%20report2012.pdf

U.S. new houses are about 2,600 square feet:

http://eyeonhousing.org/2013/09/05/new-single-family-home-size-rises/

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Daniel, U.S. per capita GDP is $10,000 a year more than Canada:

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita

Also, I may add, it seems, less than 3% of Canada’s population is Black and less than 2% is Hispanic.

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Dan, there are many studies. However, I’ve tried to present solid facts, e.g. differences in housing square footage and better comparisons, e.g. a difference in immigration from poor countries. My point has often been you cannot get something for nothing, which some commentators imply, and there are other factors. Some people are not realistic. They’re deluding themselves.

Here’s an article:

“…according to a report from the Conference Board of Canada… Canada’s per-person income is approximately $6,400 less than the U.S. average income, a gap that has doubled between 1984 and 2006.

“Lower labour productivity accounts for the largest component of the income gap between Canada and the United States,” the conference board said.

Productivity measures how much each worker makes. In Canada, the measure has trailed American productivity growth for at least a decade.

Jim Stanford, chief economist with the Canadian Auto Workers, said Canada’s high dollar and the country’s concentration in energy industries are bigger threats to national productivity than the tax regime.

“The very poor performance of Canadian productivity during the last three years reflects the structural effects of Canada’s energy specialization as a producer and exporter of natural resources,” Stanford wrote in a recent study for the Canadian Centre for Policy Alternatives.”

http://www.cbc.ca/news/business/canada-s-living-standard-9th-among-17-top-nations-conference-board-1.727603

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Dan, median income can be an inaccurate measure of living standards too, particularly between countries.

For example, in Western Europe, a larger proportion of income = GDP = output represents government.

Workers can be overpaid and output can be overstated.

Western Europeans compared to Americans live in much smaller houses, drive much smaller cars, or ride bicycles, there are much fewer shopping malls per capita (U.S. consumption represents 70% of GDP, while Western European consumption represents 60% of GDP), etc..

U.S. real median household income rose sharply in the 1980s and 1990s, even with increasingly larger trade deficits, which subtract from GDP, and bounced back in the 2000s, on top of those huge gains, while trade deficits continued to increase. However, since the U.S. economy peaked in 2007, U.S. real median household income has fallen sharply.

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