As I mentioned in a previous lecture, Jevons has some interesting things to say about markets.
The central point of a market is the public exchange, where traders agree to meet and transact business.
A market can have a specific locality, like a stock market or a fish auction, but it is not a necessary condition.
Traders can be spread over regions or even countries as long as they stay in close communication with each other.
"Thus, the common expression Money Market denotes no locality: it is applied to the aggregate of those bankers, capitalists, and other traders
who lend or borrow money, and who constantly exchange information concerning the course of business.", as Jevons says.
For a properly functioning market, Jevons demands absolute transparency, or in his words, "It is also essential
that the ratio of exchange between any two persons should be known to all the others. It is only so far as this community of knowledge extends that the market extends."
Knowledge of the real state of supply and demand is essential to the smooth procedure of trade,
and Jevons finds it quite legitimate to compel the publication of any requisite statistics. In this context, Jevons refers to in his days "recent" legislation in the Cotton Statistics Act of 1868, which required cotton mills to publish their production data: transparency enforced by law.
"Publicity, whenever it can thus be enforced on markets by public authority, tends almost always to the advantage of everybody except perhaps a few speculators and financiers.", as he says.
Let me finish with a sidetrack. Jevons has of course, much more to tell about economic thought, but this struck me. He calls it "The Law of Indifference".
The law: "...what is undoubtedly true, with proper explanations, that in the same open market, at any one moment, there cannot be two prices for the same kind of article."
In the Netherlands, there are two major retail chains, drugstores: "Het Kruidvat" and "Trekpleister". They sell the same products
and are owned by the same owner. Yet, various identical products differ in price at one or the other.
Of course, Jevons would say these are not the same market, but wait: if they are under one owner and sell identical goods within less than a few kilometers, is that truly different markets? Perhaps the law needs nuance.
So Jevons’ law isn’t false, but it depends on what you call a "market." And that’s exactly the question modern economics still wrestles with.
So next time you see two prices for the same thing, ask yourself: are these really the same market, or does each market treat its consumers differently?
Main Sources:
MacMillan The Encyclopedia of Philosophy, 2nd edition
of Economic Thought (2012)
TABLE OF CONTENTS -----------------------------------------------------------------
1 - 100 Philosophers 9 May 2009 Start of
2 - 25+ Women Philosophers 10 May 2009 this blog
3 - 25 Adventures in Thinking 10 May 2009
4 - Modern Theories of Ethics 29 Oct 2009
5 - The Ideal State 24 Febr 2010 / 234
6 - The Mystery of the Brain 3 Sept 2010 / 266
7 - The Utopia of the Free Market 16 Febr 2012 / 383
8. - The Aftermath of Neo-liberalism 5 Sept 2012 / 413
9. - The Art Not to Be an Egoist 6 Nov 2012 / 426
10 - Non-Western Philosophy 29 May 2013 / 477
11 - Why Science is Right 2 Sept 2014 / 534
12 - A Philosopher looks at Atheism 1 Jan 2015 / 557
13 - EVIL, a philosophical investigation 17 Apr 2015 / 580
14 - Existentialism and Free Will 2 Sept 2015 / 586
15 - Spinoza 2 Sept 2016 / 615
16 - The Meaning of Life 13 Febr 2017 / 637
17 - In Search of my Self 6 Sept 2017 / 670
18 - The 20th Century Revisited 3 Apr 2018 / 706
19 - The Pessimist 11 Jan 2020 / 819
20 - The Optimist 9 Febr 2020 / 824
21 - Awakening from a Neoliberal Dream 8 Oct 2020 / 872
22 - A World Full of Patterns 1 Apr 2021 / 912
23 - The Concept of Freedom 8 Jan 2022 / 965
24 - Materialism 7 Sept 2022 / 1011
25 - Historical Materialism 5 Oct 2023 / 1088
26 - The Bonobo and the Atheist 9 Jan 2024 / 1102
27 - Artificial Intelligence 9 Feb 2024 / 1108
28 - Why Am I Here 6 Sept 2024 / 1139
The Discussion
[13:23] Max Chatnoir: Wow huge nearby lightning strike. I may disappear....
[13:23] herman Bergson: oh dear...
[13:23] .: Beertje :. (beertje.beaumont): be careful Max
[13:24] Particle Physicist Bejiita (bejiita.imako): ooow ok
[13:24] Particle Physicist Bejiita (bejiita.imako): the marketing gods are angry, maybe
[13:24] Particle Physicist Bejiita (bejiita.imako): well indeed I have seen this myself I know
[13:24] herman Bergson: So we now have reached the stage of consumer-oriented economic thought
[13:25] Particle Physicist Bejiita (bejiita.imako): different price for the same thing dependent on the store, for ex
[13:25] Particle Physicist Bejiita (bejiita.imako): but i take it as they have like different profit margins
[13:25] herman Bergson: That is what I said, but when the stores aree owned by the same person???
[13:26] Max Chatnoir: So what is the same product different prices?
[13:26] Max Chatnoir: Different demand?
[13:26] Päivi (nicolesteel): Added value, a smile and a cup of coffee is offered in one store, things a customer does not expect
[13:26] Particle Physicist Bejiita (bejiita.imako): hmm then it gets trickier, but indeed I've heard about that also and this us usually unknown to the consumer that 2 stores have the same main owner and charge different for the same thing
[13:26] Particle Physicist Bejiita (bejiita.imako): I've heard bout this indeed
[13:27] Particle Physicist Bejiita (bejiita.imako): but never dove deeper into it
[13:27] herman Bergson: The same toothpaste, for instance, Max
[13:28] herman Bergson: or shampoo
[13:29] herman Bergson: It will be interesting to see what the next economists have to say about this subject.
[13:29] Particle Physicist Bejiita (bejiita.imako): Like for ex we have 2 stores nearby here One is ICA and the other is called Willys. Willys in general have lower prices than ICA but they are not the same owner, BUT they could as well have the same owner, as said this is often invisible to the consumer unless they do their own research
[13:30] herman Bergson: Jevons was well aware of market manipulation and speculation...
[13:31] herman Bergson: According to Jevons, identical products should be exchanged for identical prices
[13:31] Particle Physicist Bejiita (bejiita.imako): aha
[13:32] herman Bergson: But as Nicole said, add a smile to the product and an extra dollar ㋡
[13:32] .: Beertje :. (beertje.beaumont): does that count for prices in another country? Same products I'm talking about, much cheaper in Germany than in the Netherlands
[13:33] Particle Physicist Bejiita (bejiita.imako): Jevons' idea only exists in a perfect and fair world
[13:33] herman Bergson: yeah.. you could say...this is about different markets
[13:33] Particle Physicist Bejiita (bejiita.imako): but the world is not fair
[13:33] Max Chatnoir: So does the same store have different prices in different neighborhoods?
[13:33] herman Bergson: The German market isn't meant for Dutchies :-))
[13:33] .: Beertje :. (beertje.beaumont): yes Max
[13:34] .: Beertje :. (beertje.beaumont): Jumbo has different prices, in the same city
[13:34] Particle Physicist Bejiita (bejiita.imako): ok
[13:34] herman Bergson: Yes, the stores I am talking about aren't 100 m away from each other
[13:35] herman Bergson: Yes, I still have to figure out what to think about this...although ...I have some clue...
[13:36] Particle Physicist Bejiita (bejiita.imako): well its same here. There is a smaller ICA store here earby ad a larger ICA a bit away; the smaller one has a bit higher prices, but that is because each store is its own individual company and the small one can't get gross discounts because they buy smaller amounts than the larger store can
[13:36] Päivi (nicolesteel): Not even McDonald's has the same prices in my country; differences from place to place
[13:36] herman Bergson: Keep in mind...what is happening today is not the economic thought from 1900, when pure capitalism began to take shape
[13:37] Particle Physicist Bejiita (bejiita.imako): so smaller stores pay more for the same article when they buy them in = higher out price to compensate
[13:37] herman Bergson: We still have a lot to discover here, I think....
[13:37] Particle Physicist Bejiita (bejiita.imako): compensate
[13:38] Particle Physicist Bejiita (bejiita.imako): aha
[13:38] herman Bergson: That could be the case Bejiita, or the small store has a more greedy owner :-)
[13:38] Particle Physicist Bejiita (bejiita.imako): can be both
[13:39] Particle Physicist Bejiita (bejiita.imako): but that's the general picture I have of how it works
[13:39] Particle Physicist Bejiita (bejiita.imako): gross discounts
[13:39] Particle Physicist Bejiita (bejiita.imako): rebates
[13:39] herman Bergson: Yes, that is why so many small businesses went bankrupt due to the big malls
[13:39] Particle Physicist Bejiita (bejiita.imako): hmm
[13:40] Particle Physicist Bejiita (bejiita.imako): i try to support the one nearby here as much i can when i only need fewer items + it's just like a 3 min walk
[13:41] Particle Physicist Bejiita (bejiita.imako): if im only out of candy and milk for ex but have everything else
[13:41] herman Bergson: Well, time to move on to another economic thinker...
[13:42] herman Bergson: New thoughts, new answers....
[13:42] Particle Physicist Bejiita (bejiita.imako): true
[13:42] herman Bergson: So, thank you all again for your participation
[13:43] Max Chatnoir: Thanks, Herman.
[13:43] .: Beertje :. (beertje.beaumont): Thank you Herman
[13:43] herman Bergson: Class dismissed....
[13:43] Päivi (nicolesteel): thank you
[13:43] Particle Physicist Bejiita (bejiita.imako): ㋡
[13:43] Max Chatnoir: But why do they have different prices in different nearby stores?
[13:44] herman Bergson: THAT is marketing, Max
[13:44] herman Bergson: This subject has not yet shown up because in 1900 they had no idea what it was
[13:45] Max Chatnoir: So is everythin in the store more or less expensive or is it more random?
[13:45] .: Beertje :. (beertje.beaumont): they want you to visit every store if you want low prices
[13:45] .: Beertje :. (beertje.beaumont): it's time consuming:)
[13:45] Max Chatnoir: and people who don't have time to do that just get stiffed?
[13:46] herman Bergson: I'll investigate this matter in detail Max and gonna compare prices in detail between the two
[13:46] Max Chatnoir: Thanks!
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