VISIBLE PRICES RUN MARKETS, NOT INVISIBLE HANDS!
Paul Steger posts on TwinCities.com Letters to the editor 23 Jan
HERE ‘THE MARKET'S 'INVISIBLE HAND'
“I hope all those who, when gasoline prices were rising to painful levels, blamed it on gouging by the big oil companies, are paying attention. To what do they attribute the steadily falling prices we've seen for months? Is it because the collective charitable actions of those same heartless corporations have combined to give us consumers a generous but temporary reprieve before turning up the screws again?
No, the truth is that neither corporations, nor nations, nor groups of suppliers, such as the increasingly irrelevant OPEC cartel, can prevail against the most important law in economics, that of supply and demand. Watching a free (or nearly free) market apply its "invisible hand" to find the proper price of goods can be an instructive and even fascinating process to watch. How sad that we forget this so quickly.”
Paul Steger, River Falls, Wis.
Given that all prices are VISIBLE what possible role is left for an invisible-hand?
Is there an entity of some kind in existence that brings supply prices to equal demand prices? If so, how does it work across the billions (trillions?) of price decisions, dispersed across all the potential buy-sell decisions taking place each hour/minute of the day?
Just who is Paul Steger who knows this but never once in recorded history has anybody showed how such an invisible entity operates, from whence it came from, what exactly it does or what energy sources operate it? Even in theories of general equilibrium there is no mathematical term for an ‘invisible-hand’.
Paul, it doesn’t exist! Dispersed people observe visible prices and react or don’t react to them. These dispersed people have different views and different personal circumstances and motivations.