>Transaction costs are what a firm has to invest in order to
>maintain the rules of doing business. "The cost of doing
>business". North estimates that transaction costs were around
>25% of the economy at the end of the last century; now they
>represent something like 85%. (Think of money spent lobbying, for
>example) This is clearly indicative of a major change in "the
>way of doing business", in the institutional context
>of "the market".
GEMA Summary April, 15 1998:
Amount spent to produce food consumed
in the US in 1996 (farm cost): $126 billion.
Amount spent on marketing it: $421 billion
that results in two questions: i assume, there is a reason, why
marketing costs are so high and that the big resellers made a
calculation on the optimum level of advertisement.
question 1: why are the resellers investing such enormous sums in
marketing ? is it useful for direct marketers to consider more
advertising and invest more money in marketing than before ?
question 2: how are these subsidies distributed ? WHO gets WHAT
part of the whole cake ?
you can make more money, if you transport one bull from hamburg to
argentinia and the steaks back to hamburg than from raising the
bull itsself. reason: subsidies for exporting the bull... i
strongly doubt, that the real farming community gets a considerable
piece of the cake... anyone got numbers about the shares for
farmers, resellers, marketing, transport ??
the European community is shifting to pay the subsidies (less than
before, but exclusivly and DIRECTLY, so there is a net gain for
him AND the european bank) to the farmer. that means: the farmer
himself can decide much better, if a certain task is useful for
production or not.
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