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To: Art Bechhoefer who wrote (102434)	5/15/2001 6:24:53 PM
From: Don Lloyd	Respond to of 436258

Art - Don, your belief that "There is also no reason why a free market cannot consist of a single seller and a single buyer" seems to run counter to the whole idea of a free market. If there is only one seller and no alternative seller, then I fail to see what difference it makes whether the buyer knows anything about the value of the goods or services for sale. The buyer will pay whatever the seller wants, or the transaction won't go through. The whole concept of a free market, at least in the economics textbooks I've read, requires numerous buyers and sellers. Without that, you have a monopoly. Conversely, if you have only one buyer, the same is true, as the seller is forced to meet the buyer's bid price, or the transaction doesn't take place. You can define a market however you wish, but the market I'm talking about is the one that all economists I know recognize as a free market. Your difficulty seems to be in the fact that the word 'free' simply doesn't register. A free market is one in which an exchange is made (or not made) strictly due to the free choices of the buyer and the seller, and is not moderated by the whim of a government bureaucrat. At the instant of an actual transaction the highest bidder will typically be buying a good from the lowest asker (should be a word) and the presence or absence of other buyers and sellers is only of historical interest, having helped determine the conditions of sale, but not whether the transaction is mutually agreeable or not in the end. When you talk about the buyer knowing anything about the value of the goods or services for sale it probably demonstrates that part of the problem is that you have a mistaken (but common) idea of what value is. There is no such thing as an objective value for any good or service. All values are subjective and are determined on the margin. Economic transactions are made not between a buyer and a seller who agree about the values of the specific amounts of the goods to be exchanged, nor between a knowledgeable winner and an ignorant loser, but rather between two parties who not only subjectively disagree about the values involved, but each of whom believes that the transaction to be made benefits himself more than any available alternate transaction precluded by the one under discussion. The question of the buyer having to know something about some external value of a good or service simply is unnecessary and misleading. It is true that extra knowledge may help a buyer drive a harder bargain, but it is his own subjective valuations of the goods to be exchanged that determine whether the transaction takes place. Regards, Don

To: Art Bechhoefer who wrote (102434)	5/15/2001 6:26:29 PM
From: Ilaine	Read Replies (1) \| Respond to of 436258

>>Competition does not require a certain number of competitors or a government-defined market share; it requires equal rules for everyone in the rivalrous process of innovative development.<< mises.org on Microsoft This article by Thomas DiLorenzo demonstrates that I was mistaken to use the term "natural monopoly." mises.org Deepak Lal has some interesting things to say: cato.org Something by an oil and gas lawyer: libertyhaven.com A collection of links on the free market view of utility regulation: environmental.networkroom.com