Let me ask you one thing. Are you disputing my premise that the amount of cattle necessary meet the beef demand is always greater than the amount of cattle needed to meet the leather demand? The model I have been discussing is based on this premise and if that’s what you’re disagreeing with I understand your objections (although I think the premise is correct). This doesn’t seem to be the point you’re trying to make but perhaps I’m misunderstanding your position.
Larkin, I never disagreed with anything you said, ever. Nor did I imply disagreement.
So what was your point? What exactly is it you think I’m not seeing?
My point was that if we don’t know what the profit is from sawdust (or hides) then we can not say what effect the demand for sawdust (or hides) will have on production. It may be negligible or it may be massive.
Do you disagree with that point?
My point extends to saying that if the the profit from sawdust (or hides) represents a large proportion of the total profit then we can say the demand for sawdust (or hides) will have a large effect on demand.
Do you disagee with that point?
Since “the guy I’m arguing against” won’t actually answer straight questions perhaps you can explain what it is you think I’m missing. I certainly didn’t miss the point you raised in your last post. In fact I raised that point first.
No, you are not.
You keep saying “As long as cattle are being slaughtered for beef, a percentage of their hides will be sold for leather. The percentage might go as high as 90% or drop as low as 1%. This will affect the prices but will have no effect on the number of cattle being slaughtered - they’re still being slaughtered for meat not hides.”
That is total contradiction to what I have been saying. We are not in agreement.
I have demonstrated why what you say is wrong. You are so certain of this, and so afraid of being proved wrong for some reason, that you refuse to answer simple questions.
The ridiculoius statement of yours that I quoted above could only possibly be true if leather contributed absolutely nothing to the profitability of sluaghtering cattle. John Carter has proven that this is not the case.
As such what you say is demonstrably wrong.
Please don’t misundertsand me. I disagree with almost everything you have said in this thread. It all all complete nonsense.
You’re not seeing his argument, which is that there are cases where a change in the demand for leather may not affect the number of cows slaughtered. He may not know economics-speak, but that’s his argument. And I think he made it pretty clearly, which is why I don’t understand why you got so angry.
However, since you seem to understand me, and since I understand him, by the transitive property we all understand each other and we can go home happy.
P.S.
Yes I can – a Giffin good. E.g. potatoes in Ireland
No. I am disputing your repeated and obviously ignorant assertions that, depite leather having an effect on the profitabilityof slughtering catle, it will have no effect on the demand for cattle to be slaughtered.
That is what I am disputing. It is quite clearly nonsense. It literally makes no sense. You admit that the demand for leather can affect the profit made per beast at the abbatoir, yet maintain that this increased profitability won’t lead to an increase in the numbe rof cattle the abbatoir will wnat to slaugther.
Gold standard ignorance.
Any chance of getting an answer to those simple quetsions now? Or are you going to simply ignore it again?
I rather hope you do refuse again. Every time you do you remove whatever little credibility remains to you on this topic.
Ok, you’re not in agreement, but you’re wrong. Prices can be affected by a change in the demand for leather without affecting supply
No, I have no problem with him making such an argument. But that isn’t his argument at all.
He has quite clearly stated that in all cases where demand for leather affects profitability for abbatoirs it will not affect the number of cows slaughtered so long as the majority of the market demand comes form beef.
I have never disputed that there may be odd cases where a change in the demand for leather may not affect the number of cows slaughtered. Ever. I don’t know where you got the idea that was so.
What I do dispute is this nonsensical claim that leather will never affect the demand for cattle so long as beef demand outsrips leather demand.
Tell me Larkin. Do you believe that leather will never affect the demand for cattle so long as beef demand outstrips leather demand?
I got ‘angry’ because he is perpetrating ignorance on these boards. Hang around a bit and you will see that most folks here get angry about that.
I also got ‘angry’ because I asked him simple questions in an attempt to fight ignorance and he refuses to even acknowledge them, much less answer them.
So Larkin, since you seem to agree with his claims that that leather will never affect the demand for cattle so long as beef demand outstrips leather demand, would you care to answer my 3 simple questions?
I don’t think you do actually understand him.
Just to test this tell me if you agree with this statement:
“As long as cattle are being slaughtered for beef, a percentage of their hides will be sold for leather. The percentage might go as high as 90% or drop as low as 1%. This will affect the prices but will have no effect on the number of cattle being slaughtered - they’re still being slaughtered for meat not hides.”
Firstly I’d like to see a reputable recent reference that potato consumption didn’t decrease at all when the price of potatoes rose. My understanding is that the very idea that Giffen goods actually exist is considered debatable and actual examples are hard to come by.
Even if we do accept their existence, are you implying that beef is a giffin?
No I am not wrong. And have never argued that prices can’t be affected by a change in the demand for leather without affecting supply.
I have no idea where yu keep getting these wild misrepresentaions of my position from. Are you actually reaidng my posts.
I have never ever, anywhere said that prices can’t be affected by a change in the demand for leather without affecting supply.
What I have said that there is no reason for LittleNemo’s oft repeated claim that that prices will never affect supply when they are altered by a change in demand.
Are you suggesting that prices always, or even mostly, fail to be affected by a change in the demand for leather without affecting supply? Because that is what LittleNemo has been saying. That no matter wehat the demand for leather or what price changes that produces, demand for cattle will never, ever increase so long as the amount of beef demanded outsrips the amount of leather.
No, that is pretty much exactly what I’ve been saying all along. Larkin obviously understands what I am saying.
Blake, are you intentionally misspelling my name? If so, it seems a little petty. Normally I overlook little things like this but you seem to be trying to offend me, so I was wondering if it was deliberate.
Let’s think about it. Let’s suppose that each slaughtered cattle produces one unit of beef and one unit of leather. Demand for beef is positive and there’s a market-clearing price. In our world, the demand for beef exceeds the demand for leather (your assumption).
Since the supply of leather is equal to the supply of beef (in our imaginary world), the price of leather must fall until the supply equals the demand. However, by assumption, there is a surplus of leather.
Let’s assume no externalities, free market, etc.
So, pop quiz, what’s the price of leather? What’s the profit on sales of leather?
Of course, I’m (mostly) joking. But my basic point, that Little Nemo’s position isn’t totally insupportable, stands.
Do I? Ok, fine, lets say I do. What are the questions?
Hmmm…let’s assume that giffen goods exist. In that case, yes, beef could very well be a giffin. If giffin goods exist they must be necessities (e.g. food) that is sufficiently cheap that it makes up a large percentage of the diet of the poor. I could see theoretical situations where those conditions hold.
No, You haven’t been saying that all along. I will quote what you have been saying:
“From a standpoint of preventing animal deaths, a 5% reduction in the amount of beef eaten would save more animals than a 100% ban on the sale of leather.”
Not in some cases, but always.
“Leather will remain a side product of the beef industry. As long as cattle are being slaughtered for beef, a percentage of their hides will be sold for leather. The percentage might go as high as 90% or drop as low as 1%. This will affect the prices but will have no effect on the number of cattle being slaughtered - they’re still being slaughtered for meat not hides.”
Not in some cases, but always.
But this is beside the point. Since you now appear to have conceded that in the real world the amount of leather sold will have impact on the number of cattle slaughtered I have achieved what I wanted, which is to counter your ignorant claim to the contrary.
Nobody will object to you saying that there may be theoretical cases where a change in the demand for leather may not affect the number of cows slaughtered.
Just so long as you continue to admit that the amount of leather sold will have impact on the number of cattle slaughtered.
Now we can get back to the OP.
Since we are now all in agreement that the amount of leather sold will have impact on the number of cattle slaughtered (although there may or may not be theoretical cases where a change in the demand for leather may not affect the number of cows slaughtered) we can ask how much.
How much does impact does the amount of leather sold impact on the number of cattle slaughtered. Based on John Carter’s figures it would seem to be negligible.
I believe that I am reading your posts, I believe I even quoted your post in my reply to you. Of course it’s past midnight here and I’ve been working for 20 hours, and I jumped into the middle of a thread, so I may be misintrepreting you.
The post said:
You may disagree with what he says, but the fact remains that theoretical cases can be constructed where what he says is correct. He may not have the economic vocabulary to verbalize (is that the correct word to use in a written conversation?) it, but there is nothing in that paragraph above that is wrong on its face.
Ok, fair enough.
If he’s saying that the fact that leather supply exceeds demand implies that leather demand will not affect production of beef, well, yeah, he’s right (given certain assumptions, such as the assumption that all leather is equal <- we can’t make this assumption except to win a debate point).
But even if what he says is wrong, it’s no so much wrong as to deserve the tone of your posts (as a new poster I may not be familiar with the dynamic here, so feel free to ignore that last sentence)
I’ll go one further than that. Since the cattle producers are profit maximizers (your assumption) the impact of a marginal change in demand for their product is zero.
Okay, let me go back to your questions. I don’t fell they’re rlevant here but I’ll answer them to the best of my ability.
My answers, given your premises, would be:
- $50
- $25
- $0
Are these the same answers you got?
Now I’m going to speculate on where you’re going here (and if I’m guessing wrong, please correct me) and surmise that you’re going to take the third answer and say that that proves that if there was no demand for leather and profit dropped to zero dollars then no cattle would be slaughtered. Am I correct?
But this premise cannot be correct. As I have already written the amount of cattle needed for beef is significantly larger than the amount of cattle needed for leather. So most cattle are being slaughtered for meat and their hides go unsold. So for those cattle, the profit from the leather sale was zero. Which proves that most cattle are being sold for beef at a profit with zero leather sales.
So let’s say I’m the slaughterhouse guy. I have an order for ten thousand cattle’s worth of beef and five hundred cattle’s worth of leather. So obviously I want to buy ten thousand cattle for slaughter. Now the first rancher shows up and, by coincidence, has 500 cattle. I offer him $500 apiece for the meat and an additional $10 apiece for the leather (which is a realistic price considering I can afford to turn away 95% of the hides). This rancher is happy to collect his $510 apiece and we make a deal.
Now the second rancher comes. I offer him $500 apiece for the meat. But he says, “You gave that last guy $510 apiece for the meat and hides. I want the same price.” I tell him I no longer want hides. He can either sell me his cattle for $500 apiece or I will go to the next rancher and offer him $500 apiece. I am not going to buy hides that I don’t want just because he wants to sell them.
Now, as I pointed out above, we’ve already proven that most cattle are sold at a profit for meat alone (or most ranchers would have gone out of business before now). So the $500 I’m offering must be a reasonable price for meat only sales (or I would have gone out of business before now). So the rancher may grumble and take my offer or he may decide “screw you” and refuse. But some other rancher will accept my offer and collect his $500 profit apiece. If this wasn’t a reasonable price then the beef business isn’t going to exist anyway and we know it does exist.
So at the end of the day, I’ve bought my 10,000 cattle - the number I needed for my beef demand. And incidentally the number I needed for my leather demand. But, and here’s the point I’ve been making, I bought the number of cattle I needed to fill my beef order. My leather order was completely unrelated to the number of cattle I bought because it was subsumed by my beef order. If a Fonzie craze swept the nation and leather demands quadrupled, I would have bought 2000 hides instead of 500. But I still would have slaughtered the exact same number of cattle - 10,000 - and that’s what this whole discussion has been about.
That was actually LittleNemo’s assumption. Not mine. But I;m willing to accept for the sake of argument.
You haven’t provided sufficient information. The price of leather will be whatever the market will stand. That’s all we can say form the information given.
Again, I can’t know because you have given insufficient information. All I can say the profit will vary depending entirely on what the market will stand.
If that you point then you totally failed to make it. How does a hypothetical with insufficient information lend support to anything?
Well since you agree that leather will never affect the demand for cattle so long as beef demand outstrips leather demand consider this hypothetical posted above.
An abbatoir pays an average $350/beast.
They sell all the products of that beast (gut contents, blood, hooves, leather, beef etc) for an average $400.
The average amount the receive for the leather component is $50
Under that scenario wouldn’t it be likely that an increase in demand for leather will increase the average profit/beast slaughtered? And isn’t it likely that this increase in profit will stimulate the abbatoir to slaughter more cattle?
So isn’t it true that in this instance leather will effect the demand for cattle, even though beef demand outstrips leather demand?
That’s news to me. All the reasonably concrete examples I have seen of Giffin goods have been luxury items like sports cars and training shoes.
Can you tell me why you believe Giffin goods must be necessities?
As I said, I would like to see a recent reputable reference showing that potatoes or any other necessary food item are an actual Giffen good before I would buy into any of this. My understanding is that the actual existence of Giffen goods is considered to be a bit like the existence of the black holes. Everybody can imagine scenarios where they might exist but no bugger has even seen their tracks much less captured a live specimen.
Wait a minute, do we go through the looking glass at some point?
Blake, if I’m understanding your last post correctly, after arguing that I was wrong in every one of my posts, you now feel that you see some concession in those same posts.
I hate to point out the obvious, but all of my posts say the same thing now that they did when I first posted them. I have no capacity to edit them. If you’re now seeing any change in them it’s in your interpretation not in the words themselves.
I think at this point, the best thing for all of us would be to go to bed and get a good night’s sleep.
You are misinterpreting me, no maybe.
Nor have I ever denied that such is theoretically possible.
The problem is that LittleNemo didn’t say it was theoretically possile. He said that that was the case, Right here. Right now. In the real world.
Al sorts of things are theoretically possible, but if you read the description on the front of this forum you will se that it is the place for factual answers. Not the discussion of theoretical answers. LittleNemo said that it was fact that in the real world, right now “The percentage of leather sold might go as high as 90% or drop as low as 1%. This will affect the prices but will have no effect on the number of cattle being slaughtered - they’re still being slaughtered for meat not hides.”
So you are saying that right now, in the real world it is a fact that “The percentage of leather sold might go as high as 90% or drop as low as 1%. This will affect the prices but will have no effect on the number of cattle being slaughtered …”
Good. If you believe that then provide a reference, or some strong logical argument that makes such a conclusion inescapable. And if you don’t believe that is a fact then there is something wrong on the face of it. It is unsupported. These boards are about fighting ignorance. This forum is for factual answers and not opinion. Presenting opinion as fact is wrong on the face of it and on every other level.
I won’t ignore it, but I will point out, yet again, that it’s not the fact that it’s wrong that produces that tone. Had you read my post when you fist asked me this question you would have seen that it is his behaviour that has produced that tone.
The fact that what LittleNemo says is wrong is actually a good thing. We are all here to fight ignorance, and often we only know where we are ignorant by posting erroneous information and having it corrected. God knows I do it on a daily basis.
The fact that LittleNemo said something that was wrong and wouldn’t even answer simple questions so we could fight the ignorance he presented, that is a bad thing. It makes it impossible to fight his ignorance but worse, given the nature of the discussion it make sit impossible to conclusively show any lurkers that he is wrong.
Definitely not cool behaviour on these boards.
Firstly I disn’t say marginal I said negligible. Two different things.
Secondly how does that follow? Gold miners are profit maximisers. Nonetheless a marginal ($1/ounce) change in demand for gold will produce non-zero impact on gold production if sustained for long enough.
Nope, we can give a price. There is a SURPLUS of leather and no constraints on the sale of leather. There is only one price at which this can be true.
Nope. We’ve fixed the price of leather in the previous question. There is only one profit level that coincides with that price (assuming free disposal)
Hypotheticals, especially corner solutions like the one I gave, make you think about the economics. In this case, the question is “what’s the profit-maximizing solution?”
Are thse figures consistent with the assumption that beef demand exceeds leather demand? By assigning positive profit to sales of leather you’re Begging the Question.
No, giffin goods must be necessities. If you’re thinking of luxury goods you’re confusing a giffin good with a different concept. A necessity takes up a lower percentage of your income as income increases (ummm…ok, here we have to assume positive consumption if we’re using this definition of necessity v. luxury). It also has to be cheaper than other foods, so that, relative to the giffen good the other foods are luxuries. As the price of the giffin good increases your (relative) income falls, and (since it’s a necessity) it takes up a larger percentage of your spending. When the percentage increase in your spending on the giffen good exceeds the percentage increase in the price of the good, bang–an increase in price causes an increase in demand.
No, experiments with rats have given real-life examples of giffen goods. Maybe Vernon Smith at Arizona?
LittleNemo since you have now admitted that the amount of leather sold will have impact on the number of cattle slaughtered there’s no point answering my questions, which were intend since they were intended solely to get you to see that this is the case. Actually they were intended solely to get you to see that this was possibly the case.
Which is an argument that I never made.
Nice strawman though.
Which I’m not. The posts that were bollocks before reman bollocks now. The posts that say that leather has no effect on beef production were unsupported bollocks then and they remain bollocks
The only thing that has changed is your total about face.
From saying “This [the amount of leather sold] will affect the prices but will have no effect on the number of cattle being slaughtered” you are now in complete agreement that the amount of leather sold will have an impact on the number of cattle slaughtered.
But the bit where you said the amount of leather sold will have no effect on the number of cattle being slaughtered remains bollocks. Even you now admit it’s bollocks and that the amount of leather sold will have an impact on the number of cattle slaughtered.