Economics Dictionary of ArgumentsHome
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| Stock keeping: Stock keeping in economics refers to the process of managing and maintaining inventory or stock of goods. It involves tracking the quantity, condition, and movement of products to ensure that businesses can meet demand without overstocking or understocking. Effective stock keeping helps optimize supply chain operations and minimizes costs. See also Production, Production structure, Economy._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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Murray N. Rothbard on Stock Keeping - Dictionary of Arguments
Rothbard III 136 Stock Keeping/Price/Rothbard: At any point on the market, suppliers are engaged in offering some of their stock of the good and withholding their offer of the remainder. >Price/Rothbard. This withholding is caused by one of the factors (…) as possible costs of the exchange: either the direct use of the good (…) has greater utility than the receipt of the [exchange good] in direct use; or else the [good] could be exchanged for some other good; or, finally, the seller expects the final price to be higher, so that he can profitably delay the sale. >Utility/Rothbard. The amount that sellers will withhold on the market is termed their reservation demand. This is not, like the demand (…) , a demand for a good in exchange; this is a demand to hold stock. Thus, the concept of a “demand to hold a stock of goods” will always include both demand-factors; it will include the demand for the good in exchange by nonpossessors, plus the demand to hold the stock by the possessors. The demand for the good in exchange is also a demand to hold, since, regardless of what the buyer intends to do with the good in the future, he must hold the good from the time it comes into his ownership and possession by means of exchange. Rothbard III 137 We therefore arrive at the concept of a “total demand to hold” for a good, differing from the previous concept of exchange-demand, although including the latter in addition to the reservation demand by the sellers. Rothbard III 139 Equilibrium price: (…) at the equilibrium price (…) the total demand to hold is [e.g.,] eight, equal to the total stock in existence. Thus, the equilibrium price not only equates the supply and demand on the market; it also equates the stock of a good to be held with the desire of people to hold it, buyers and sellers included. Stock: (…) the market always tends to set the price of a good so as to equate the stock with the total demand to hold the stock. It is clear that someone must possess this stock, since all goods must be property; otherwise they would not be objects of human action. >Action/Rothbard. Since all the stock must at all times be possessed by someone, the fact that the stock is greater than total demand means that there is an imbalance in the economy, that some of the possessors are unhappy with their possession of the stock. They tend to lower the price in order to sell the stock, and the price falls until finally the stock is equated with the demand to hold. Elasticity: In cases where individuals correctly anticipate the equilibrium price, the speculative element will tend to render the total demand curve even more “elastic” and flatter. At a higher-than-equilibrium price few will want to keep the stock - the buyers will demand very little, and the sellers will be eager to dispose of the good. On the other hand, at a lower price, the demand to hold will be far greater than the stock; buyers will demand heavily, and sellers will be reluctant to sell their stock. >Elasticity/Rothbard. Analysis: The total demand-stock analysis is a useful twin companion to the supply-demand analysis. Each has advantages for use in different spheres. One relative defect of the total demand-stock analysis is that it does not reveal the differences between the buyers and the sellers. However, it focuses more sharply on the fundamental truth that price is determined solely by utility. >Utility/Rothbard, >Price/Rothbard, >Speculation/Rothbard. Rothbard III 148 Non-renewable goods: The analysis above applies to all goods - to all cases where an existing stock is being exchanged for the stock of another good. For some goods this point is as far as analysis can be pursued. This applies to those goods of which the stock is fixed and cannot be increased through production. They are either once produced by man or given by nature, but the stock cannot be increased by human action. Such a good, for example, is a Rembrandt painting after the death of Rembrandt. Such a painting would rank high enough on individual value scales to command a high price in exchange for other goods. The stock can never be increased, however, and its exchange and pricing is solely in terms of the previously analyzed exchange of existing stock, determined by the relative rankings of these and other goods on numerous value scales. stock. In these cases, there is no further problem of production - of deciding how much of a stock should be produced in a certain period of time. Rothbard III 227 Stock keeping/Rothbard: (…) granted the behavior of the owner of a given stock, what determines the size of that stock of goods? Now obviously, except in the case of personal energy, these goods must have been previously produced by someone (or previously found and transformed in the case of pure nature-given factors). This previous production was undertaken either by the present owner or by someone in the past, from whom he had acquired, by exchange or gift, this stock of goods. The past investment must have been made for [this] reason: the expectation of a future money return from the investment, compensating for the sacrifice of waiting to consume in the future instead of the present. Rothbard III 228 This previous investor expected that he would be able to sell the good for a money income greater than the money expenditures that he had to make on the factors of its production. As an example, let us take Robertson with a stock of 10 units of P. How did he acquire this stock? By investing money in buying factors of its production, and then producing it, in the hope of making a certain net money income, i.e., in the expectation that the money income from the sale of P would be greater by a certain amount than the money expenditures invested in the various factors. Now how did the previously produced stock of the factors X, Y, and Z come into existence? By the same process. Various investors engaged in the production of these factors in the expectation of a net money income from the investment (total money income from the investment greater than total money expenditures). This investment decision accounts for the existence of all the stock of all producers’ goods and durable consumers’ goods for any community at any given point in time. Money: The stock of the money commodity [is], like that of the consumers’ and producers’ goods, the result of an investment decision by an investing producer, who expected his money income to be higher than his money expenditure._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
Rothbard II Murray N. Rothbard Classical Economics. An Austrian Perspective on the History of Economic Thought. Cheltenham, UK: Edward Elgar Publishing. Cheltenham 1995 Rothbard III Murray N. Rothbard Man, Economy and State with Power and Market. Study Edition Auburn, Alabama 1962, 1970, 2009 Rothbard IV Murray N. Rothbard The Essential von Mises Auburn, Alabama 1988 Rothbard V Murray N. Rothbard Power and Market: Government and the Economy Kansas City 1977 |
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> Counter arguments against Rothbard
> Counter arguments in relation to Stock Keeping
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