Full text: Price Takers' Plenty in a Model of Pure Capitalism.

The simplest and most obvious of those cheaper ways is the opening up 
of foreign markets through imperialism or the lowering of barriex's to trade. 
Historically, that may well have been the first response of price makers 
to their excess supplies. A recent book, for example, blames the backwardness 
of British product design on the ease with which "the Empire and the British 
sphere of influence in Latin .America provided markets for the products they 
should have updated." ((Cf. Andrei-; Tylecote, The Causes of the Present 
Inflation, p.26.)) The expansion of the domestic market through the creation 
of a buyers' paradise may well have been a much later development; and it is 
significant that it started and had its full flowering in America until not 
so long ago.(g very isolated and isolationist country/^ 
The creation (or non-creation) of a buyers' market by price-maker 
sellers under the impact of their excess supply, or as if they had an 
excess supply, is only a part of the welfare implications of the .sellers' 
dominance in product markets. I propose, however, to proceed now to the 
parallel case of the buyers' dominance in the labor market and other factor 
markets and rather deal with that at greater length. 
The behavior of buyers as price makers and its impact on buyer-dominated 
markets are in many respects the exact mirror image of the characteristics of 
the seller-dominated markets just discussed. They are nevertheless worth 
discussing in detail, even in more detail, and for three reasons. First of 
all, a mirror image of an original is not identical with it and, in this 
case, not that easy to visualise. Secondly, the special nature of the 
labor market does create some significant differences. Lastly, an all-important 
diffei'ence between product and factor markets is that whereas producers

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