[extropy-chat] Re: Seven cents an hour? (was: Riots in France)

[Rafal Smigrodzki]

On 11/17/05, gts <gts_2000 at yahoo.com> wrote:
> On Thu, 17 Nov 2005 13:27:55 -0500, Rafal Smigrodzki
> <rafal.smigrodzki at gmail.com> wrote:
>
> > Since at Wal-Mart prices are low and profits high, it means that it is
> > a very efficient company.
>
> Profits are a measure of efficiency but not retail prices.  Efficiency is
> reflected in measures like earnings per share, profit margin, return on
> equity, and ultimately measured best by looking at the stock price.

### Yes, I know about classical economic theory, and marginal analysis
and the other measures of efficiency (production cost, profits, stock
price), and I still say that retail prices are a good measure of the
efficiency of both individual companies, and whole economies.
Especially in retail, where profits are to a large extent dependent on
sales volume, many companies aggressively act to increase sales
volume, and to this end they keep prices low - of course, only highly
efficient companies can lower prices without losing money.

----------------------------------------

On 11/17/05, gts <gts_2000 at yahoo.com> wrote:
> On Thu, 17 Nov 2005 13:29:01 -0500, Rafal Smigrodzki
> <rafal.smigrodzki at gmail.com> wrote:
>
> > On 11/17/05, gts <gts_2000 at yahoo.com> wrote:
> >> On Thu, 17 Nov 2005 11:47:45 -0500, Rafal Smigrodzki
> >> <rafal.smigrodzki at gmail.com> wrote:
> >>
> >> > ### No, it's you who are ignorant of basic economics. In a competitive
> >> > economy, price is the measure of efficiency, period. Just learn this
> >> > simple fact.
> >>
> >> Where do you get that idea, Rafal?
> >
> > ### Econ 101.
>
> I think I understand your confusion, Rafal. You're confusing your micro
> and macro economics. In an efficient free market, prices for a good or
> service will be lower than otherwise, but this does not mean companies
> that sell at lower prices are necessarily more efficient.

### For commoditized goods, over the long run, yes, companies with
lower prices are more efficient. I know what is microeconomics, what
is macroeconomics, and that all of macro comes from micro, thank you.

Rafal