talk amongst yourselves.

 

As a whole, is eBay good, bad or have little effect on the economy?

 

I'll use a live example.

 

Back in March, before a vacation, I wanted to buy that new John Hallerpin book about the 2008 elections. Forget what it was called, but it was a good read.

 

So I went to Barnes and Noble and it was selling for full price. (guessing $30). I thought, there's no way I'm paying $30 for a book. Went on eBay and bought a used copy for $12. Read it on vacation and re-sold it on eBay for $8.

 

While this is a small example, it speaks of a larger question.

 

If eBay didn't exist, I would probably have bought this book brand new for $30. Thus this purchase helps the bookstore, store employees, publisher, author, truck drivers (moving the books), paper manufacturers, etc.

 

Instead, I bought this used, which helped, me and the eBay seller.

Instead of purchasing a new version of something that there's extra of already, you saved $18. You also put $12 into the pocket of the seller. That money will, hopefully, be spent on something more useful than redundant copies of books being produced.

 

It's the classic "broken window" story.

Instead of purchasing a new version of something that there's extra of already, you saved $18. You also put $12 into the pocket of the seller. That money will, hopefully, be spent on something more useful than redundant copies of books being produced.

 

It's the classic "broken window" story.

I wonder if he has a point specifically in a liquidity trap where we are now though. In the current situation, all of the other rules are reversed; that extra $12 is not likely to be spent, it's likely to be saved in some form or used as a method of deleveraging. That's going to alter the calculus away from what you originally said.

Instead of purchasing a new version of something that there's extra of already, you saved $18. You also put $12 into the pocket of the seller. That money will, hopefully, be spent on something more useful than redundant copies of books being produced.

 

It's the classic "broken window" story.

 

which can be true.

 

But I'll tell you that I put the extra $18 into my savings account at the bank.

Excellent counter-points.