[chailatte]

1.) No, you're confused on the very basic demand/supply. Efficiency = provides cheaper supply for a demand. Essentially shifting the supply line down. Free = wiping out demand altogether (market no longer needed). Two different thing.

2.) No. No. No. Money is a store of value. Only governments and economist believes otherwise (and prints money and reduces the value of them. That's why people buy gold/silver). "What matters for prosperity is the quantity of goods and services being produced in an economy" You're kidding me. So empty cities in Spain and China is prosperous? Walmart full of Chinese items is prosperous? Then why are we not prosperous now, instead of 44M Americans on food stamps.

3.) Buggy whip is not a substantial market. Therefore nobody cared about it. If a major market like software/music/movie/tv/website, worth hundreds of billions, is threatened by free, people care.

4.) Until we have a perfect world where everything is free, then we can talk about it. Otherwise we still need jobs for money to fight for food/clean energy/materials/infrastructure.

5.) free is $0. Company receives $0. Has to shut down. Lay off everyone.

6.) if we keep losing jobs to free, the net effect is negative. Not hard to figure it out.

[rubiety]

1. "provides cheaper supply for a demand" - Nice ;-). I'm not disagreeing with you that if it's free there is no market. But that's an entirely different question from asking whether or not the value of goods and services produced is a net increase or decrease, and this is the relevant question. You're also treading very close to confusing "supply" with "quantity supplied", which is ironic as you simultaneously accuse me of misunderstanding supply and demand: http://econperspectives.blogspot.com/2008/05/supply-vs-quant...

2. Huh? Of course money is a store of value, and it's a medium of exchange. And I'm totally with you on skepticism of the Fed/printing money. All of that is completely tangential to my original argument. Your comments on Spain and China could deserve another ten paragraphs of explanation concerning comparative advantage and the benefits of unilateral free trade. It would not be a worthwhile debate.

3. The size of the market doesn't have anything to do with the economics I'm explaining to you. This is another common fallacy where people confuse magnitudes of the parameters in reasoning with the reasoning itself. We're talking at the margin.

4. Once again, a total evasion of any substance. Not even worth it.

5. Sure. Clearly the there is not a net benefit to that particular company and its employees. And? Does analysis of net economic costs and benefits befall one particular company or the economy as a whole? You haven't thought past stage 1, nor does what you said address my (5) whatsoever.

6. Still no argument here, as you completely evade accounting for all costs and benefits over the costs and benefits which are either 1) very visible to you and everyone else, or 2) extreme for one particular group of (special interest) people.

You might enjoy this article: http://www.econlib.org/library/Bastiat/basEss1.html

"There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen."