“The distinguishing feature of the original producers is that, as a result of specialization, the direct use-value of their product to them is likely to be almost nonexistent. The only reason for a producer to reserve, to hold on to, any of his stock is speculative—in anticipation of a higher price for the good in the future. If we eliminate the temporary speculative element, and if we consider the sellers as the specialized original producers, only the following factors ultimately remain: the revenue for both the buyers and the sellers is the expected direct use of the goods acquired; the costs are the exchange for a third good that is forgone because of this exchange.”
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Related:
- 13-8d Speculative anticipations merely assist the market price toward equilibrium
- 13-1a3a2a The difference is implied in any exchange and division of labor
- 13-1a3a2b The extent of the market determines the extent of division of labor
- 13-8b Supply = Stock - Reservation Demand
- On specialization
- 2-1c2 ‘Specialization’ - Minimizing opportunity costs maximize comparative advantages and leads to prosperity
- 2-1c2a Matt Ridley - ‘Self-sufficiency leads to economic downturns. Mutual interdependence is more robust.‘
- 11-3.4 ‘Utility’ (marginal, diminishing, increasing) - Specialization beats the Invisible Hand