Quote from: Erdogan on July 11, 2014, 01:37:21 AM

Quote from: DannyElfman on July 10, 2014, 11:20:05 PM

Quote from: efreeti on July 08, 2014, 06:25:24 PM

Quote from: Erdogan on July 08, 2014, 05:49:51 PM

Quote from: tee-rex on July 08, 2014, 04:27:03 PM

Quote from: Erdogan on July 08, 2014, 03:58:59 PM

"You can only save from money taken from your household earnings (you won't save from loans), that is money which you would otherwise spend on consumption. Please try to explain how this can be any good for the economy in the long"

How can it not be good? Where do you think your consumption comes from, if not someone has produced them? How can you get it, without producing something of comparable value and trade? The savings in money and investments from prudent producers is the root of increased productivity, that benefits all.

Sorry, but I don't understand how what you say is related to what I am talking about. Yes, someone has produced what I consume, so if I decide not to consume (but prefer to save instead), there is overproduction (as simple as that). We are not talking here about producers' investments.

There can never be overproduction in the free market. When one individual produces, sells his product and saves money, prices will decrease and others will be able to buy more. Saving is letting others in front of you in the consumption queue.

Overproduction and under supply can happen in free market.

Planning and mis-allocating capital can go horrible wrong even in the total decentralized system.

Over production happens when more is produced then what can reasonably be consumed. A merchant can only sell so many products before there is no demand for the product anymore and merchants often have a time limit to how soon something much sell either because of seasons or because a specific product will "go bad" after a certain time

When supply strengthens, and demand softens, the profits of that specific market is eroded, and the capital is taken to a more profitable market space. There is no overproduction. Temporalily, prices can go lower than the producers are happy with, but that is also a temporary advantage for people just on the edge of purchasing that exact stuff. Conversely with the absurd notation of under-supply.

On the other hand in a nonfree market, that is someone disturbs the free market using the threat of physical force in violation of human rights, meaning government, prices and volume is always suboptimal. Compared to what consumers and producers want, which is the only important thing. Some random person, voter or not, is not entitled to push his values on to others.

Companies are not always able to react to the market this quickly as it takes time to build new factories, to train workers to do new processes in order to make different products. Companies also need to have work in progress so they would be forced to continue building some product even after demand falls a lot because they would finish the work they have started. It is also natural to have ebbs and flows in demand so a company may think that a decline in demand is just a natural ebb in demand.