Incentives

In the Market for Black Rhinos, no one has rights over the existing Rhinos. Therefore, there is no incentive for people to keep up the supply of Rhinos by breeding them because someone else will just kill them and keep all the profits. People will therefore kill Rhinos without breeding them, resulting in a decreased population of Rhinos. As the Rhino population decreases, the supply of there horns goes down, and their respective value goes up, thus increasing the incentive for people to kill even more Rhinos. This market is different than other markets because no one has property rights over the Rhinos. In normal markets, people will keep up the supply so that they can continue to produce goods in the future. This creates a stable system in which there is always a supply from which to create goods. This is not the case with the black Rhino, and so the population of Rhinos is steadily decreasing.

Power of Markets

One of Whelan's ideas in his book is incentives, which are the forces that drive people to do things in markets. There are more incentives than just to make money. Whelan brings up the fall of the Berlin Wall as an example. When the wall fell, Coca-Cola started giving out free bottles to those who were living in relative poverty on the other side of the wall. They didn't do it because of the money, in fact, there was no money in the short term; they did it because it made coca-cola much more renown throught the world, and thus increased their profits. This shows that in economics, there are many different types of incentives.

Another point Whelan makes is the point about how competition works to improve consumer interest. He brings up the fact that airplanes used to be fancier than they are nowadays and how some people complain that they have gone down in quality. This may be true, but they have gone down in price as well. Businesses use low prices and high quality of good to keep their customers from switching to other businesses. Even in areas where the prices are controlled by the government, businesses will try to increase the quality of their goods, so there is still competition. In Cuba, for instance, the price of gasoline is set by the government, so gas station workers will wear bow ties and do maintenance on your car while they pump your gas for you.

A third idea Whelan Brings up is the idea that resources will go to where they are most useful. As the price of gasoline increases, people will more and more look to alternative sources of energy. The government doesn't need to spend money on alternative energy because the high price of gasoline should be incentive enough to get people to start investing in alternative energy. On a simpler level, If the demand for yogurt increases, more of America's supply of milk will start going to the yogurt industry.