The Real Efficiency of Economics

Aug 12, 2011 by

Economics textbooks state, and I have taught, that economics is an efficient way to satisfy the needs and wants of people. I contend that we have misunderstood and misapplied the meaning of efficiency in economics. A few months ago I chipped a tooth at a well known restaurant on of all things a garden burger. I guess someone forgot to remove the pebbles from the garden. I reasoned that it was the responsibility of the restaurant/corporation to repair the damage to my tooth. It would have been easier to make my personal dental insurance responsible but that would be unreasonable. So I filed the necessary complaint and waited. Four months later the reply came in the mail. The agency contracted by the corporation to deal with these types of matters wrote that “based upon the facts as we understand them” code for we added up the dollars and cents, “we do not feel our client would be held legally liable for your damages” code for you do not have a lawyer so we can not hear you. They go on to say that “we sincerely apologize for the incident” code for we admit that it happened ”but find no evidence (I provided x-rays and dentist testimony as evidence) to suggest our client was the cause of the damages”  code for you are a dollar sign not a human being. What this really means is that it is cheaper for them to deny liability because who in their right mind is going to get a lawyer and spend stupid amounts of money to find justice. It makes perfect dollars and cents. This is economic efficiency in its understood and applied form. We are all a value in the economic world and efficiency is the measurement of a human being against cold hard cash. What has gone wrong with the free market?

The true efficiency of the free market is that it has no barriers to market entry fostering competition to produce many goods and services, innovation, and where both parties voluntarily exchange and benefit . The invention of the corporate system has impeded the sole proprietorship, partnership and other forms of true free market structures. The corporation is constantly building monopolies which control prices, OPEC (organization of petroleum exporting countries) for example, and limits our access to the market. Our choices are managed and it becomes a buy this or nothing situation. When business is transacted it becomes one sided and the advantage goes to the corporation, because you are not recognized as a sovereign consumer but a thing to extract cash from. Is this efficiency?  Should I pursue justice? Will I pursue justice? Stay tuned.

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