Cheap horses - an economics lesson.

["Ed and Wendy Hauser" <sisufarm@mmmpcc.org>]

I vowed to keep quiet this time, but find that I can't ,so here goes.

We live in a country that has a regulated free market, otherwise known as
capitalism.  During the middle ages the Church decided on "fair prices" for
labor and things.  Under Marxism the state decides on the price of things.
In our economic system the fair price is determined by what a willing buyer
will pay a willing seller.

All this talk about manufactured goods being priced by the manufacturers is
not true.  The price we pay is the cheapest price we can find for the item
we want.  It so happens that it is quite low by any standard, and the reason
is that the economies of scale allowed the efficient manufactures to make a
small amount of money on each unit and stay in business.  If you don't
beleive this try to buy a Studebaker, a Minneapolis, a Rambler, a Packard,
an International pickup truck, or any of hundred others.  Some of these
(like the Minneapolis) were junk, and some (like the International) were
great but the company could not make money at the price people would pay.

Another example is the stock market.  I just looked and found that the
average NASDAQ stock is about 21% lower in price than it was the first week
in March.  Has the "real value" changed that much?  Of course not, the
problem is that the willing buyers aren't willing to spend as much as they
were then.

As long as enough horses are produced in this country, that a person can
find what he/she considers to be a good endurance prospect for a price that
is below "commercial production cost," the smart shopper will buy them.
This will keep the price low.

Note I said "what they consider a good endurance prospect".  The average
endurance horse purchaser may be right, or he/she may be wrong, but he/she
is still going to buy what he/she considers to be the best prospect for the
least amount of money.

We have the same thing happening in the farms across the country.  More food
is produced than is needed, so the price stays low.  The inefficient farms
go out of business all the time.  This causes "the demise of the family
farm".  I have heard of this my whole life.  Nothing that congress has done
has changed this basic fact of capitalism.


Ed  Hauser
1140 37th St.
Hudson, WI 54016
sisufarm@mmmpcc.org