Perfect Competition and Equilibrium

Pyotr Malatesta

Only under conditions of perfect competition, are prices an outcome of equilibrium between supply and demand, and therefore are a measure of efficiency, given an assumed distribution of property.

Since real markets never conform to conditions of perfect competition, there is no reason to think that economies are ever in equilibrium, nor that economies ever "tend" towards equilibrium (this "tending toward equilibrium" is a conceptual confusion, like "always tending towards pregnancy, without ever being pregnant" being the same as "never pregnant" ).

Equilibrium is an imaginary set of conditions that real economies are never necessarily in, nor could real economies obtain this imaginary condition, without such a restrictive set of assumptions, that could never plausibly occur.Only under conditions of perfect competition, are prices an outcome of equilibrium between supply and demand, and therefore are a measure of efficiency, given an assumed distribution of property.
Since real markets never conform to conditions of perfect competition, there is no reason to think that economies are ever in equilibrium, nor that economies ever "tend" towards equilibrium (this "tending toward equilibrium" is a conceptual confusion, like "always tending towards pregnancy, without ever being pregnant" being the same as "never pregnant" ).

Equilibrium is an imaginary set of conditions that real economies are never necessarily in, nor could real economies obtain this imaginary condition, without such a restrictive set of assumptions, that could never plausibly occur.

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