Trends in economics

The simple fact that governments are run by human beings with the normal human desire for personal well-being and individual or institutional aggrandisement must be insisted upon only because of a long intellectual tradition of implicitly treating government as a special exception to such incentives and constraints.

Rationality means nothing more than its basic root notion of making a ratio---weighing one thing against another in a trade-off. Where intention does exist among the individuals involved in a systemic process, that does not mean that their intentions determine the outcome.

How accurately prices convey knowledge depends on how freely they fluctuate. It seems strange that a business enterprise set up for the explicit purpose of making a profit would have to be forcibly prevented from selling at a loss, quite aside from the larger social question of whether such a prohibition benefits the economy as a whole. The costs of an industry are difficult for third parties to determine. Government regulation and their estimates of "cost" are based on objective statistical data on actual outlays.

Any tax represents force used to influence decisions, and subsidies represent taxes forcibly extracted from others. It is indirect price fixing. The higher price is just an internal transfer of wealth among people. What makes a system as a whole poorer are the transactions that do not take place because of the artificially high price (Deadweight loss). Where there is a government-run monopoly or a government-regulated industry where competition is kept out by force of law, then the prices that are set by government cause some customers to subsidize other users, which is called cross subsidy.

The history of American transportation, from municipal bus and streetcar lines to railroads and airlines, is a history of government-imposed cross-subsidies. Short-distance passengers subsidize long-distance passengers. The rush-hour traffic congestion caused by thousands of people going to work separately in individual automobiles has been denounced by social critics as "irrational" and explained by some mysterious psychological attraction of Americans to automobiles. But it is the corollary of false price.

Labor unions are the private force. Think about the relative price.

Creaming skimming is a pejorative description of a certain kind of business behavior: company only sell a product or a kind of service to high-value or low-cost customers.