From Robert Wenzel with responses from Dr. Walter Block in blue:
Hi Walter,
Also, when you write:
"For most people, coffee and tea are substitutes, not complements. That’s a theory of mine."
Do you see this as just an observational fact, or do you think that this is a forecast on your part that must continue forever?
Best,
Bob
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Dear Bob:
I see it as an empirical generalization about an economic observation. My theory, my hypothesis, is that it will long continue.
Best regards,
Walter
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Hi Walter,
Your answer does not provide for why you put a "specified time limit" on your price of beans theory? What is the driving factor?
Best,
Bob
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The driving factor is that it takes time for people to change their behavior patterns. They have inertia operating on them. This applies widely to human behavior. It even applies in physics.
Walter
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Hi Walter.
So are you saying a stock market crash could never occur?
Best,
Bob
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I certainly don’t SAY that. Do I imply that? I think not. Why do you say not that I explicitly say that, but that I imply it?
Walter
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You say this: " it takes time for people to change their behavior patterns"
It certainly appears to me that a crash is behavior patterns changing very rapidly.
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Oh, now I get it. I agree with you. Inertia usually operates, but not always.
Walter
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So how would you know when this applies? Can you just look at empirical data or are we back to thinking how people might act under different given circumstances?
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Different strokes for different folks. The longer you give people, usually, the more they can react to any given situation. That’s why baseball pitchers throw the ball at 90 miles per hour; they don’t want the batters to have enough time to react, so as to hit the ball
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Earlier debate posts in this series:
Part 1
Part 2
Part 3
Part 4
Part 5
Part 6
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