[Vision2020] Free Market Economics

[g. crabtree]

Mr. Schou, Might I also recommend "The Theory of Poker" by David Sklansky. I feel certain that it will help with those pesky analogies.

gc
  ----- Original Message ----- 
  From: Jeff Harkins 
  To: Andreas Schou ; vision2020 at moscow.com 
  Sent: Thursday, January 26, 2006 8:33 PM
  Subject: [Vision2020] Free Market Economics


  Sorry Mr. or Ms. Shoup (I don't know your gender and don't want to be too familiar) but you need to avail yourself of a good dose of Keynesian economics.

  And you have not come close to describing or demonstrating an understanding of the WalMart business model.

  For a primer, I suggest " The World Is Flat" by Thomas Friedman.

  For advanced reading, look at some classics economics work by Milton Friedman "Price Theory" and Paul Samuelson.  I also suggest that you peruse the early works by Peter Drucker (not an economist) and the works by Michael Porter.  Porter has a couple of books that may be very helpful in helping you understand the WalMart successes.  Please look for Competitive Advantage: Creating and Systaining Competitive Advantage (New York: Free Press, 1985 and Competitive Strategy Techniques for Analyzing Industries and Competitors (New York: Free Press, 1980).

  I am confident that you will find the knowledge very enlightening.

  Cheers, 

  At 04:48 PM 1/26/2006, you wrote:

    > You are right about my confidence in a free market. Perhaps you could give
    > me a few examples where an inferior business beat out a superior one.

    Let me use a poker analogy. If I had a trillion dollars, played poker
    for a living, and won every poker game I played by going "all in" on
    every hand, would I be the best poker player that ever lived? Hint:
    no, I would not.

    This is Wal*Mart's business model: saturate the market, make
    monopsonic agreements with suppliers, and run as thin a margin as
    possible in new stores until all the other business goes under. Is
    this a good business strategy? Yes. Does it contribute to market
    efficiency -- which is generally how a "superior business" is
    understood to work? No. It does not.

    -- ACS

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