Comments (5)

• Ben Ranson

  The image of a branding iron is an appropriate metaphor for Mises' searing arguments. The first half of this selection is great. However, the second portion, with its nebulous discussion of monopoly prices, is somewhat dated.

  A point that I wondered about is Mises' contention that, "from the point of view of the seller good will is, as it were, a necessary factor of production."

  Can anyone suggest any literature relating to the latter issue (goodwill as a factor of production, capitalizion of goodwill, etc...)?

  Published: July 14, 2009 10:43 AM

• David Spellman

  The discussion of trademarks and good will borders on being an argument for intellectual property. If good will is a factor of production, then developing and investing in brand identity and confidence would be homesteading a niche of intellectual property. If someone else can use your trademark and brand to sell substandard products with impunity, then they are impacting the value of your property and business.

  If we argue that trademarks and brands are not scarce, then why would anyone want to infringe on them since they could easily choose from an infinite number of alternatives? The obvious answer is that trademarks and brands with good will are scarce commodities. If we argue that scarcity is a prerequisite to the ability to make a property claim, then a good name definitely qualifies.

  The fact that people pay real money for good will and a name is de facto proof that brands and trademarks are real property. Money talks and all the counter arguments are the stuff that walks.

  Published: July 14, 2009 11:20 AM

• BioTube

  Anybody selling under somebody else's brand name without permission is fraud, plain pure and simple.

  Published: July 14, 2009 3:00 PM

• Ben Ranson

  Not to sound like a broken record, but I would be obliged if someone would recommend a more modern economic analysis of good will.

  Published: July 14, 2009 6:23 PM

• Bruce Koerber

  Divine Microeconomy Consulting
  Tuesday, July 14, 2009

  The Economics Of Good Will And Other Virtues!

  "Given the precedent that already exists in the economic literature and following the example of Mises, I will proceed along similar lines . . . "

  "Each of us knows that having flexibility as a part of the order of things makes life much more enjoyable. Flexible order in our lives makes it easier for us to adjust to changes – the inevitable changes that occur in our lives.

  Employers who provide an environment that incorporates flexibility will tend to have a ‘happier’ workforce that most likely will translate into a more productive and a more stable workforce. Also, customers appreciate having flexible and various options available to them if a product doesn’t meet their needs.

  Flexibility incorporated into the production process, providing more options to employees and customers, leads to higher productivity and customer satisfaction, both of which are good for business. Here we have customer satisfaction as one possible example of the ‘goods and services’ emerging from flexibility."

  And next the second of six examples:

  "No one is offended by being treated with courtesy. It inspires greater respect for oneself and, most definitely, greater respect for the courteous person.

  Since the market is the embodiment of social cooperation, courtesies become the norm. If it is courteous to be on time that becomes the standard, ‘out of courtesy.’ And each time these courteous practices are applied the social relationships advance to new levels of mutual respect. As a consequence cooperation and coordination improves.

  Here we have market cooperation and coordination as an example of the service emerging from courtesy. By acquiring and practicing courtesy work relationships will change and there will be a tremendous increase in productivity since cooperation and coordination will increase."

  The HUMAN ESENCE of Economics pp. 56-58.
  

  Published: July 14, 2009 8:02 PM