Tuesday, May 02, 2017


Mungo MacCallum posts (1 May) on ECHO NET DAILY HERE
Even as he prepared to remove the velvet glove from his iron fist, Malcolm Turnbull spoke more in sorrow than in anger : ‘the market is not working as it should,’ he mourned.
But this was, like so many of his lawyerly assertions, at best a half truth. As Turnbull, a businessman and a banker – a graduate from Goldman Sachs no less—must know, the market was working precisely as it was meant to.
The gas producers saw a better price and latched on to it. This was text book supply and demand: if there was a shortage of gas available for all, the highest bidders got what was around.
Certainly there were unexpected consequences when a glut of the stuff forced international prices down while the domestic buyers were stuck with soaring costs to secure whatever was left, but hey, that’s just Adam Smith’s invisible hand at work, or perhaps more of a rapacious, grasping talon, a predator red in tooth and claw.”
Mungo MacCallum sports that Aussie predilection for using somewhat coarse language to express themselves. 
At base, Mungo’s idea of the “invisible hand” as a “rapacious, grasping talon, a predator red in tooth and claw” is typical of Aussie bar-talk used to shock first-year students from up-tight communities in the suburbs into loosening up.

There is no invisible hand in the market. Just VISIBLE prices. That’s how markets operate.


Blogger Xerographica said...

A price isn't a process. The Invisible Hand, however, is a process. In my recent blog entry here's how I defined the Invisible Hand...

a prioritization process of people dividing their limited dollars among their unlimited desires which signals the social relevance of desires and incentivizes a division of society's limited resources that is optimally beneficial to society as a whole

8:53 pm  

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