ECON 103 Lecture Notes - Lecture 6: Public Good, Gordon Tullock, Public Choice
Document Summary
He will arbitrage otherwise through time not physical space. Joes motives are his own self-interest, he performs helpful service as a whole; it"s as if he"s promoting an end to equalize price of wheat across time. He drives the price, as increases of demand, causes price to rise. Speculation minimizes consequences by sharing prices during bad times to make price better in the future. Forward looking aspect of markets driven by interest of speculators, not only causes prices of commodities to be more equal but to emphasize point but shares hardship and good fortune through time. If he"s incorrect he makes society worse off, transporting wheat from where it"s less abundant to more abundant. We are all speculators, we all live in time and travel through it, we can"t avoid it. The profits they earn are a measure of how useful they perform.