Re: Keynes and competition

[Bruce McFarling <ecbm@xxxxxxxxxxxxxxxxxxx>]

On Thu, 24 May 2001 23:24:05 -0700, John O'Donnell
<jackodonnell@xxxxxxxx> wrote,

>Bruce McFarling wrote:
><<SNIP>>
>> However, it is not surprising of the New Keynesians fall
>> into logical traps and empirical absurdities under perfect
>> competition, since the inability to spot fallacies of
>> composition seems to have spread through the profession
>> like a slow working flu, while the empirical absurdities
>> are built in from the start.

>It is not just an error of composition, it is an obvious
>error of definition. No matter how small the difference from
>other things, everything that is is uniquely itself. A
>monopoly exists for each and every item owned or otherwise
>controlled, however trivial that monopoly may be.

If a wheat producer's wheat is purchased to go into a
silo, by type and grade, and is sold from the silo by
type and grade with reference to the original producer,
then the small differences have no commercial bearing --
the product has been "standardised".  It is of course
complete and utter BS to act as if standardised products
are somehow a normal case, and differentiated products
are some kind of variant case.  Clearly, without a
standardisation *process*, all products would be
differentiated, so differentiated products are the
normal case, and standardised products are the variant.
But you can't eliminate standardised products by playing
word games.

Virtually,

Bruce McFarling, Shortland, NSW
ecbm@xxxxxxxxxxxxxxxxxxx