Home » Return of the Economic Hitmen - Doing to Europe What They Did to Latin America

juandelacruz's picture

Yup, a basic assumption of

Submitted by juandelacruz on Tue, 2009-04-07 17:09.

Yup, a basic assumption of economics is that economic actors are too small to effect the price equilibriums on their own. In this state, actors do not have an incentive to beggar thy neighbor. Their only recourse to increase the value of their wealth is to increase their income.

In small countries I have observed that some actors are so big that their wealth is affected by the relative income of their neighbors. Thus they have a perverse incentive to not just increase their income, but also to decrease their neighbor's income.

In remote areas with difficult transportation and communication, this becomes even more apparent.

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