Gates outlines Army transformation goals

[Totenkopf]

Not really sure how military control of the design process will guarantee a quality weapon. Wasn't the M1 Garand, one of the best WW2 infantry weapons designed by a man NOT in the military? Also, sometimes weapons have to be designed outside the system b/c the military can be slow to "catch up with the times". Think Billy Mitchel and the development of the tank. Perhaps, to clear up any potential for further misunderstanding, you could explain exactly what you mean by controlling the process. It sounds a lot like you're calling for military run design and production factories, which would be no guarantee of quality products.

[John Galt]

Huh? How can "equilibrium" and "free market" both be a priority. One is socialism and the other is capitalism. Socialism has controlled markets and capitalism has free markets. If So-and-so wants to buy from Company X, they should be free to do so. Company X works hard to produce a competitive product at a competitive price for the chance to increase market share (thereby "upsetting the equilibrium"). "Upsetting the equilibrium" is precisely what competition is.

 

I'll try to boil down what I'm trying to say in one sentence. It's not fair for the government to use large quantities of public money to grossly upset the market in a relatively small niche industry(civillian rifle production) and undermine competition there, leaving companies X and Z at a competitional disadvantage.

 

 

Please operationally define what you mean by "perfect competition"? "Perfect competition" is actual an actual economic term may be being used out of context here.

 

I misremembered(nice Bushism there) the definition. What I was referring to is a situation in which multiple companies manufacture more or less identical products. I forgot the other traits of perfect competion. Mea culpa.

 

Well, if we truly are in a state of perfect competition, then it doesn't really matter which firm the military gives the contract to. Since we are considering giving the contract to an outside entity, we can safely assume that we have already determined that it is more expensive to produce the weapons ourselves rather than buy them from someone else. And since each of the 3 company's products are exactly identical (perfect competition), then it doesn't really matter which one is selected (you'll get the exact same 300,000 units from company X as you would from company Y or Z). So since no one company has higher quality or lower costs, then you could easily let them "rock, paper, scissors" a decision for you.

 

Right, but it's still upsetting the market. It would be unfair to award any of those three companies the contract.

 

 

Yes, the private sector for rifles. You're still influencing the market for raw materials. Shouldn't we be concerned about those markets as well?

 

Of course, but the market for raw materials, basically wood and steel, is much larger, and government procurements of those items would upset that market as much as, or perhaps even less than, the construction of new government buildings. Basically what I'm getting at is the size and relative stability of the market involved should determine the extent of government interference in those markets. Springfield Armory purchasing the materials necessary for the production of 300,000 service rifles would produce far smaller ripples on the larger raw materials market than would procuring 300,000 ready-made rifles from a single company in the much smaller firearms market.

 

essentially we need to be judicious in spending government funds so as not to create taxpayer-funded monopolies.

[Achilles]

I'll try to boil down what I'm trying to say in one sentence. It's not fair for the government to use large quantities of public money to grossly upset the market in a relatively small niche industry(civillian rifle production) and undermine competition there, leaving companies X and Z at a competitional disadvantage.

Okay. How is it fair to waste larger quantities of public money (taxes) by producing weapons when purchasing them is less expensive? Also, assuming that no collusion is taking place, companies X and Z were at a competitive disadvantage before the purchase took place. That's what happens in a competitive market; buyers buy the product that has the most competitive quality offered at the most competitive price. If that is what company Y was doing, then company Y has now been rewarded for it effort. Yay company Y. Yay free markets.

 

Again, you seem to think that this process undermines competition while I'm trying to point out that this process is competition.

 

I misremembered(nice Bushism there) the definition. What I was referring to is a situation in which multiple companies manufacture more or less identical products. I forgot the other traits of perfect competion. Mea culpa.

Companies producing identical (not similar, identical) products is one of the criteria necessary for perfect competition. No worries though.

 

Love the bushism!

 

Right, but it's still upsetting the market. It would be unfair to award any of those three companies the contract.

You can't avoid what you are describing in free market! It is absolutely "fair" (I prefer to deal with "equitable", but in this case "fair" still works) that the company with the most competitive product wins the contract. If we're still dealing with the hypothetical "perfect competition" model, then yes, maybe it isn't fair that one company gets it and the other two don't. That's not the military's fault. That's the company's fault for producing a product that is indistinguishable from products already in the market. This is like athletic teams that never try to do more than simply maintain a tie with the other team. Never happens in real life; one team is always trying to outscore the other. That's competition.

 

Of course, but the market for raw materials, basically wood and steel, is much larger, and government procurements of those items would upset that market as much as, or perhaps even less than, the construction of new government buildings.

Huh? Purchasing 300,000 rifles gives one company a unfair advantage and disrupts the equilibrium of the market, but purchasing the materials to make 300,000 rifles doesn't accomplish the same thing in those respective markets? Seems to me that with more competitors, such a purchase would have more of an impact, not less.

 

Basically what I'm getting at is the size and relative stability of the market involved should determine the extent of government interference in those markets.

So you're against free markets/capitalism. Just say so

 

Springfield Armory purchasing the materials necessary for the production of 300,000 service rifles would produce far smaller ripples on the larger raw materials market than would procuring 300,000 ready-made rifles from a single company in the much smaller firearms market.

I don't see how this is possible at all unless you're assuming that Springfield purchases equal amounts from all competitors.

 

essentially we need to be judicious in spending government funds so as not to create taxpayer-funded monopolies.

I'm not sure I understand the leap in reasoning. So long as their aren't any barriers to entering the market and other companies are able to produce competitive goods, then no monopoly can exist.