It is a paradox, that the modern theory of economics provides some support for the claim of the original social-democracy, that the industry would inevitably evolve into an ever increasing concentration. The present column discusses four models of combinations (trusts and cartels, oligopolies), copied from the book Industrial organization in context by Stephen Martin. Bundling of products is an efficient means of power. Price discrimination also has huge advantages, when the oligopoly is able to dictate these. Thanks to these techniques the combination can cleverly react to the reservation prices of the buyers. Thus a combination with a monopoly can even push her competitors and buyers from the market, if desired .... Read more
25-06-2019: Social-democratic views on the general interest
Author: E.A. Bakkum
The democracy can only prosper, when the state succeeds in translating the needs of the citizens into a good policy. In a previous column it is explained that during this translation the state applies its own ethics. That ethics obtains its form in the political struggle between the various political movements. The present column elaborates on this argument with some insights of the political scientist Lambert J. Giebels, like pluralism. Next views on state ethics are presented of several social-democratic thinkers from the social-democratic history, namely Curt Geyer, Willem Bonger, Eduard van Cleeff, Erhard Eppler, Thijs Wöltgens, Jos de Beus en Monika Sie Dhian Ho .... Read more
06-06-2019: The political philosophy of the state
Author: E.A. Bakkum
Many columns on this portal stress, that economic markets can function merely, when they are regulated by the state. The crucial question is how the state can translate all individual needs into a general policy. The present column starts with a recapitulation of the insights, that your columnist has acquired until now. Next these insights are compared with the views of four authors, namely Herman van Erp in Het politiek belang, Johan Graafland in Economics, ethics and the market, Rutger Claassen in Het huis van de vrijheid, and Siep Stuurman in Kapitalisme en burgerlijke staat .... Read more
20-05-2019: The debate about the industrial concentration
Author: E.A. Bakkum
Of old the social-democracy has defended the opinion, that the economy is subject to the progressing concentration of industries. More and more combinations (trusts and cartels) were supposed to form, which would lay the foundation for political imperialism. The present column studies this doctrine by means of two sources, namely Trusts en kartels by F.M. Wibaut and Das Finanzkapital by R. Hilferding. Their prediction is compared with modern economic ideas about collusion and concentration. Although it is true that often the perfect competition is absent, the apocalyptic vision of the future is totally unsound .... Read more
30-04-2019: Behavioural economics
Author: E.A. Bakkum
Behavioural economics offers a useful supplement to happiness economics, which is already prominently present on this portal. This column discusses behavioural economics by means of the book An introduction to behavioral economics by N. Wilkinson. First, the phenomenon of the bounded rationality is explained. Next, several special themes are studied, notably the portfolio management, irrational preference functions, altruism and resentment, and the discounting of time preferences. The conclusion is that the homo economicus in traditional economics is irreconcilable with the psychological insights .... Read more