[perl4ever]

It sounds like you are dismissing the phrase "improve access" as some wibbly-wobbly social justice fuzzy meaningless concept that is obscuring the important stuff.

To me, though, it sounds like the fundamental basis of the whole capitalist system - I'm thinking of the idea that free markets can only function if transaction costs are reasonably low, and the economist Ronald Coase, etc.

[pdonis]

> It sounds like you are dismissing the phrase "improve access" as some wibbly-wobbly social justice fuzzy meaningless concept that is obscuring the important stuff.

No, just as a term that is hindering understanding rather than helping it.

> I'm thinking of the idea that free markets can only function if transaction costs are reasonably low, and the economist Ronald Coase, etc.

Coase didn't say free markets couldn't function with high transaction costs. He only said it would be more difficult and take longer for those markets to reach equilibrium.

Also, the true observation that free markets in the real world are always imperfect does not justify the further claim that is usually made, that governments must intervene to "fix" these imperfections. In fact, the government "fixes" almost always make things worse, often much worse. Even on strictly Coasian terms this should be evident, since the most common source of high transaction costs in modern markets is...government regulations.

However, when it comes to basic necessities--things like food, clothing, and shelter, the kinds of things this thread was originally focused on--the issue is not transaction costs for the people who need these things. There are perfectly good, low friction markets for these necessities. The problem is that governments are skewing those markets by paying people not to produce useful things, or to produce useless things instead. Or, in the case of many third world countries, the government simply confiscates all the useful things for government officials and their cronies. I don't think "transaction costs" or "access" is a useful description of those problems.

[perl4ever]

When transaction costs are too high for transactions to be made that would improve society, the losses don't somehow get made up. You have a lot of produce or something, and you can't get it transported to the people who could use it, and it gets trashed, that's permanently lost.

It seems wrong to me to dismiss this as "taking longer to reach equilibrium", as though you get to the same destination either way. Perhaps you are interpreting "function" in a loose manner, but of course I didn't mean "function" = merely "do something".

[pdonis]

> You have a lot of produce or something, and you can't get it transported to the people who could use it

And why not? "High transaction costs" doesn't seem like a viable explanation in a world where goods constantly get shipped around the world at extremely low cost per unit. Something more like "some stupid government regulation is preventing common sense from being applied", or "corrupt officials are stealing stuff instead of letting it get sold on the open market" seems much more likely.

[perl4ever]

Because you don't have a truck?

And maybe you don't have a truck, because there are no roads.

And there are no roads, because there is no nearby marketplace.

And there is no big market, because there is nobody with capital to invest in that.

[pdonis]

I'm not sure what you're talking about, since in countries which have these attributes, nobody is producing anything that would require trucks to transport, so your hypothetical of someone having a lot of produce that they can't get to people who need it doesn't apply.

If you are simply saying that there are countries which are poor because there is nobody with capital, first, that's still not a problem of "high transaction costs", it's a problem of lack of capital. And second, the problem isn't even lack of capital, since there are plenty of people in rich countries who would be glad to invest capital in poor countries--if the corrupt governments of those poor countries weren't going to steal everything of value that got invested. So we're still looking at a problem of government corruption, not "high transaction costs".

[perl4ever]

Government corruption is exactly "high transaction costs". I mean, what is the stereotype of a poor corrupt country, but one where you have to bribe someone to get anything done?