Daily Archives: May 4, 2016

Web Site Devoted to Helping Customers Cheat Cheated its Customers

By William K. Black
May 4, 2016     Bloomington, MN

To the shock of no one, with the possible exception of men who would use such a site, it is alleged that the website devoted to helping their customers cheat their loved ones cheated their customers.  (Yes, another example of the myriad forms and layers of “spontaneous order” that von Hayek does not want you, or any economist, to think about.)  This was reported in Corporate Counsel.  Plaintiffs are trying to bring a class action fraud lawsuit against the firm Ashley Madison (“Life is short.  Have an affair”).  The firm’s client list was made public by a hacker who expressed distress at the firm’s business plan of encouraging affairs.

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Free Markets Mean Zero Economic Profit – or a 99% Profit Markup

By William K. Black
May 3, 2016     Bloomington, MN

Open up a conventional economics text and you will be taught that high among the glories of “free markets” is the “fact” that they lead to firms earning “zero economic profits.”  Economic profits are not the same as accounting profits.  An economic profit occurs when a firm receives greater profits than the minimum required to be able to raise capital in their industry.  A firm that receives a profit greater than that minimum requirement is receiving monopoly “rents” due to its market power.  Conventional economists used to believe that was a bad thing, but many conventional economists from the right are now openly hostile to antitrust concerns.

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