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URL:  http://boards.fool.com/rayvt-although-i-didnt-pen-the-comments-30577895.aspx

Subject:  Re: OT: Wealth Date:  3/6/2013  9:58 PM
Author:  ProphetWise Number:  242129 of 253150

Rayvt,

Although I didn't pen the comments concerning creating things, I feel the need to jump in.

I agree with you that we often do require middle men and others who facilitate the ultimate useful production of goods or services. This includes everything and everyone in the complex chain required to effectively deliver the goods or services to the ultimate consumer. The question is how much value do the supporting entities add or what share of the ultimate value of the product do they deserve. It's not an easy question to answer and we can't just assume that the natural course of the economy always distributes the shares in a reasonable manner.

Wherever one entity (person, company, groups of persons or companies) gains dominance or control in one area of the system, the equation becomes distorted.

Let's suppose farmers in one area of the country are dependent on one distributor who has obtained control of the only road to the ultimate market. That distributor could extract a share of the product value which is disproportionate to the costs of distribution (including compensation for cost of capital and typical risks). The same would hold if one farmer controlled all the land suitable for growing (let's say) tomatoes. That farmer might extract more for the tomatoes we need (or desire). These dominant positions in the markets create distortions.

If our economic system allows or encourages the development of such concentrations, artificially locking out competition, we all suffer.

So, it seams, I champion true free enterprise.

I believe in competition. Real competition can fuel innovation, improve the volume and variety of goods and services and (theoretically) lead to improved quality of life for all within society. However, I also have concern when extreme concentrations of economic resources, including labor, money, raw materials and means of production and distribution limit competition. When the concentration of wealth and/or income starts to artificially limit genuine competition by cornering resources (including the creation of laws and regulations favorable to those controlling the resources) then our system is no longer equitable and the pursuit and benefits of free enterprise will not be obtained.

While we can go on with this discussion, it is far off topic and I will limit my own comments to one additional post.
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