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Technology Stocks : The *NEW* Frank Coluccio Technology Forum
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To: Frank A. Coluccio who wrote (16642)9/9/2006 3:30:37 PM
From: elmatador  Read Replies (1) of 46821
 
And the Austrian school teaches us about misallocations of capital and about the corrupted price mechanisms.

Collusions among few players misallocate capital in dying sectors, which do not become subject to Schumpeter's 'creative destruction' and delay the introduction of new technologies.

Case in point the status a few years back of the mobile sector in the US when the rest of the developed world had progressed.

That misallocated capital -there were in the US, during tech bubble years, D250billion in telephony infrastructure- is still being kept alive by talks of NGN and other technologies that wrap up around the existing infrastructure. Then there is the price mechanisms. In absence of price mechanisms that reflect the real costs of services, there are investments in legacy infrastructure which causes the capital to misallocated.
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