"Transaction costs – enabling interactions that were not economic in their absence"
Can you elaborate on this please?
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"Transaction costs – enabling interactions that were not economic in their absence"
Can you elaborate on this please?
Sure. I have in mind very specific, but very numerous cases where I live, in Luxembourg, where the frictions induced by laws and regulations and the centralized monetary system leads to a suboptimal situation where A needs a good or service that B can provide, and B would be very happy to provide that good or service at a price that both would consider "a good deal". And yet because of the intermediaries and their "cuts" the price raises so much that A is not willing to pay anymore. The transaction doesn't happen, B cannot earn money and has to leave, the "supply" he was bringing disappears. Everybody ends up worse off.