Yeah that’s total nonsense. And they literally say that example demonstrates it…and it does no such thing. So not only is it a fallacious notion, their own story doesn’t even support it. All they said was the guy bought a bunch of cocoa and it caused prices to rise. They even admit it wasn’t a record…it was just the largest purchase in 14 years. (ooooOOOoooo).
They say literally nothing about profit being made because of this.
In fact, that whole page looks like nonsense. Even their definition of the concept makes no sense. They say you can corner a market by simply holding “the greatest market share in a particular industry without having a monopoly”. First of all, I don’t even know why they need the “without having a monopoly” qualifier. What does that mean? If I have a monopoly I haven’t cornered the market?
And what do they mean “the greatest market share”? Is that just supposed to mean a plurality? So, basically I could “corner the market” with virtually any degree of ownership, so long as I own more than any other one person (or company)?
Think about it. I own 0.02% of industry x. That’s more than anyone else. My closest market share competitor only owns 0.01% of the industry. By their definition, I’ve “cornered the market”.
False. Trading takes place because of the difference in valuation of the goods being traded based upon the subjective preferences of the parties involved. In other words, in a voluntary trade, both parties can benefit. Both parties expect that what they are getting from the trade will bring them more satisfaction than what they are giving up…otherwise the trade would not take place. Trade is a positive sum game.
The notion that “one guy knows better than the other”, is simply the result of the fallacious idea that trade is a zero sum game…that if one man gains, it means another man must have lost. When I go to the grocery store and give the clerk $2 and he gives me a carton of milk…I’m supposed to believe that one of use “knew better” than the other? Which one? You mean I got screwed? Or did the clerk get screwed? Which one of us “knew better” and got the better end of the deal?
Unless there was fraud somewhere in that transaction, we both got the better end. John Stossel points out that’s why you always get the weird double-thank you when a transaction takes place. You hand over the money, they hand over the merchandise and you both end up telling each other thank you. What’s that all about? It’s because you wanted the milk more than you wanted the money. The clerk wanted the money more than he wanted the milk.
Trade is made of win. (see also “Subjective-Value Theory”, “Subjective Value and Market Prices”)
More or less…so long as you recognize fraud as a form of coercion.
That, or at least near impossible to make a decent amount of profit, without taking huge risk…which when weighed against each other, the risk (and the effort) is basically too great.