Skip to Main Content
Boombustology, 2nd Edition
book

Boombustology, 2nd Edition

by Vikram Mansharamani
May 2019
Intermediate to advanced content levelIntermediate to advanced
384 pages
10h 21m
English
Wiley
Audiobook available
Content preview from Boombustology, 2nd Edition

CHAPTER 4Political Foundations: EVALUATING PROPERTY RIGHTS, PRICE MECHANISMS, AND POLITICAL DISTORTIONS

If you put the government in charge of the Sahara Desert, in five years there'd be a shortage of sand.

—Milton Friedman

When a collection of individuals agrees to form a society, they have many options in determining how to organize themselves. The political philosophy of the group will be manifested in its political-economic systems, and the range of possible solutions is wide. This chapter focuses on two key decisions that relate to a society's vulnerability to boom and bust cycles. First, we evaluate the different philosophies relating to property rights. A society's choice to allow private property to exist and to protect such property with corresponding rights is an essential prerequisite for market-determined prices to be “discovered” via supply and demand dynamics. Further, without private property rights, the idea of booms and busts may be moot, as the state owns everything.1

The chapter evaluates the mechanism through which a society chooses to determine the prices of goods, and the roles that those prices play in the allocation of scarce resources. Although significant gradations exist between the extremes, two primary price-determination methodologies are considered: (i) supply and demand–driven price “discovery” processes that take place through the interaction of buyers and sellers; and (ii) central planning–driven price dictation in which the prices of goods ...

Become an O’Reilly member and get unlimited access to this title plus top books and audiobooks from O’Reilly and nearly 200 top publishers, thousands of courses curated by job role, 150+ live events each month,
and much more.
Start your free trial

You might also like

Boombustology

Boombustology

Vikram Mansharamani
Out-Innovate

Out-Innovate

Alexandre Alex Lazarow
Supertrends

Supertrends

Lars Tvede

Publisher Resources

ISBN: 9781119575603Purchase book