Comments on: Robert Murphy on Mises and Economic Calculation

By: Levi Russell

Levi Russell — Fri, 08 Jul 2016 02:26:26 +0000

It’s a public good? So it’s either non-rivalrous or non-excludable (or both)?

I think what you mean is that it generates positive externalities. I’m not sure that’s the case, but I’d love to hear your defense of that view.

By: Bastet

Bastet — Thu, 07 Jul 2016 23:24:46 +0000

If “…government-promoted recycling operations tend to be unprofitable. For me, this creates a presumption that the value of the output in recycling is less than the cost of the inputs. In short, recycling wastes resources.”
then how about:
“…government-promoted operations tend to be unprofitable. For me, this creates a presumption that the value of the output in government-promoted operations is less than the cost of the inputs. In short, government-promoted operations waste resources.”?

By: Andrew'

Andrew' — Thu, 07 Jul 2016 21:54:16 +0000

Economists are surprised. They all should break even exactly.

By: Tom DeMeo

Tom DeMeo — Thu, 07 Jul 2016 21:08:20 +0000

Do economists really see this as an insight?

A firm can be unprofitable because it doesn’t execute well enough, which you can “tweak”, or because the assumptions that lead to their longer term capital decisions were not met, which you can’t. You can be highly competent at planning and still fail to predict the future. It is rare when a firm can find a risk free market opportunity.

In the case of recycling, contracts require assumptions about the value of the recycled waste stream. When the price of aluminum or paper drops enough, recycling loses money. It’s a bad business because success or failure is almost mostly subject to commodity prices that are out of the control of the firm, and it requires a consistent, long term, capital intensive commitment.

By: steve

steve — Thu, 07 Jul 2016 18:26:11 +0000

the vast majority of companies in the S&P 500 are barely or not earning their weighed avg cost of capital. What say you to that?

By: Lord

Lord — Thu, 07 Jul 2016 18:23:25 +0000

Profit as measured against the interest rate, which is why profitability can change. You might like Capitalism: Competition, Conflict, and Crisis by Anwar Shaikh then, who considers profitability as the endogenous organizing principal, a bit of reversion to original classical thought.

By: Kevin Erdmann

Kevin Erdmann — Thu, 07 Jul 2016 16:39:42 +0000

Bulk garbage pickup is probably the best recycling program we have. In my town the city picks it up once a month. It unintentionally serves a coordination function for local junk dealers who can drive ahead of the city garbage collectors and take anything of value.

By: Andrew'

Andrew' — Thu, 07 Jul 2016 16:15:30 +0000

Arnold, I’ve thought this topic is one way to make PSST mathy.

By: Curt

Curt — Thu, 07 Jul 2016 14:56:54 +0000

I’d like to see more than a token nod to public services (Murphy uses single example of public park). In the realm of markets and profit-based firms, this way of thinking makes sense – if you are not able to profit, then obviously your inputs are costing more than you can get for the outputs. But in the public realm where there are often no pricing mechanisms, and financing is through taxes, I’m not sure it makes much sense. It is worthwhile to think about what kinds of activities/outputs are kept in the public realm, and why.

By: Andrew'

Andrew' — Thu, 07 Jul 2016 13:04:09 +0000

Is it?