22 May, 2013 1 Comment
I haven’t blogged in English for almost two months (there is more activity on my Swedish blog), so I will write a short post just to show I am still alive.
I found this Mises quote while looking for something about catallactic theorems being valid under the “ceteris paribus” or “everything else being equal” assumption – and what to do about the fact that it is very seldom that everything else is equal. After a discussion of “Gresham’s law” and an apparent counter-example to it, I found the following:
If I simply want buy soap, I will inquire about the price in many stores and then buy in the cheapest one. If I consider the trouble and loss of time which such shopping requires so bothersome that I would rather pay a few cents more, then I will go into the nearest store without making any further inquiries. If I also want to combine the support of a poor disabled veteran with the purchase of soap, then I will buy from the invalid peddler, though this may be more expensive. In these cases, if I wanted to enter my expenditures accurately in my household account book, I should have to set down the cost of the soap at its common selling price and make a separate entry of the overpayment, in the one instance as “for my convenience”, and in the other as “for charity”. (Epistemological Problems of Economics, p. 95; translated by no less a person than George Reisman.)
This is of course a very simple catallactic theorem: Everything else being equal, one buys in the cheaper market and sells in the dearer market. And here are just two examples of everything else not being quite equal.
Not the most ambitious blog post I have written…