22 Oct 2015

Combining the Wisdom of Mises and Yogi Berra

Mises, Shameless Self-Promotion 1 Comment

In my latest FEE article on profit. The money excerpt:

Now here’s the important element: notice that although the high market price of gold keeps it from being wasted in over-the-top apartment decoration, there are lines of production that can profitably use gold. For example, jewelers who sell necklaces can do a similar calculation and decide, “The extra amount my customers would be willing to pay for a gold necklace rather than, say, a silver necklace justifies the extra expense of putting gold into necklaces rather than silver.”

Indeed, it has to be the case that some entrepreneur can ultimately afford to use a given resource, because otherwise its owners couldn’t make money from it. To paraphrase Yogi Berra, it wouldn’t make sense to say of a resource, Nobody uses that input anymore — it’s too expensive.

One Response to “Combining the Wisdom of Mises and Yogi Berra”

  1. JimS says:

    Great piece.

    It is funny when you talk to the average Joe who has been in undated with mainstream media how they look at you when you are insane when you make such assertions as there is no excessive profit. I like to ask them if they won the lottery or found out Trump was a relative and would leave all he had to them if they would give it away; certainly such windfalls are excessive? Of course the answer is usually no.

    Another segment of this same topic is alleged gouging or profiteering, particularly during a disaster or shortage. I remember the police arresting guys selling bags of ice for $10 they had brought from out of state at considerable expense to aid Hurricane Hugo victims. The men and their ice taken away. No one had anything.

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