11 November 2010

The line of 'me'

Non-exclusivity, whether on the demand side or on the supply side, makes for non-substitutibility. 
Substitutibility is the essence of competition, it is the essence of choice (as the neo-classical economist defines choice), it is the meaning of price, and it is what we mean by trade and by allocation. 
Private property allows for the distribution of things in the world such that they can be made excludible. Where things cannot be made excludible, where complementarity explains the phenomena better than excludibility, private property is not as useful an institution, the market is not as useful an allocation mechanism, and there is no point talking about prices as a measure of value. 
The very notion of an individual self has at its core the character of excludibility. Where the individual draws the line and declares to the world 'thus far is me, and beyond this is not-me' is the line of excludibility vs complementarity. All that is within the line of 'me' is explained by complementarity while all that is without the line of 'me' is explained by substitutibility. 
So the world is made up not so much of individuals and firms and clearly defined items we call goods and services and commodities and factors and resources as it made up of zones of substitutibility and complementarity and we build out institutions that depend on and service and exploit the inter-play between substitutes and complements. 
To what ends and out of which impulses? Good question. 

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