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Economists who defend disaster profiteers are wrong

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Re: Economists who defend disaster profiteers are wrong

#271

Post by TeMPOraL »

chillacy wrote: post #51
perl4ever wrote: post #16

Earlier quoted context omitted.

I was able to get kleenex and paper towels saturday because the grocery store is now limiting people to one purchase per day. I am sure there are people who need more than that, and any system of rationing should allow for exceptions. But when people insist that a "free" market is inherently correct, it's no different from insisting that your OS scheduler is perfect even though some processes never get to run https:/…

Makes sense, in the short term if you have a fixed quantity of a good and demand which exceeds supply then the solution markets will find is to allocate to those with the most resources. At that point the markets are not a particularly fair allocator. In the medium to long term though high prices slowly incentivize people to produce more of that good. So it would be like if your hardware gained more and more CPU thre…

> In the medium to long term though high prices slowly incentivize people to produce more of that good. So it would be like if your hardware gained more and more CPU threads to dish out over time, until we reach some equilibrium again.

Except the demand is going to fall back down in the future, and your hypervisor is sentient and realizes there's no point in spending its own resources to provision more vCPUs if they're going to be running idle by the time they're activated.

Re: Economists who defend disaster profiteers are wrong

#272

Post by simonh »

hamandcheese wrote: post #42
jimmaswell wrote: post #18

Earlier quoted context omitted.

Exactly this. Why is Scrooge McDuck buying the entire supply of something somehow better than evenly distributing it? I can't believe people actually think making toilet paper $20 a roll is the correct outcome instead of rationing with price controls. Maybe it's the Ferengi mentality of people seeing themselves as the exploiters.

If toilet paper was $20/roll, people would think twice before hoarding, and would probably also use less squares overall.

If they thought it might increase to $40 a roll soon, they will hoard. They might not be able to hoard as much of it, but they might still do it. Doubling your money on $1000 worth of rolls is still the same outcome whether that represents 50 rolls or 500 rolls, excepting only the logistics.

Re: Economists who defend disaster profiteers are wrong

#273

Post by croon »

roenxi wrote: post #194
notauser wrote: post #188

Earlier quoted context omitted.

Given that poor people can't afford to hoard because of the cost of storage (especially in cities) and financing, isn't it better that rich people are encouraged to hoard when supply is plentiful? The problem arises when rich people start hoarding at times when supply is constrained, because they can do it so much more rapidly and create a much greater shock to the system. It was notable in London that severe shortag…

> isn't it better that rich people are encouraged to hoard when supply is plentiful? The market signal that would make rich people hoard masks in the good times would be ... an expectation that if an unexpected crisis arose then prices would rise to extreme values. Nothing else is going to make that happen. Not even most governments manage to resist economising and running down their medical supplies after the last h…

> I'm not going to hoard in good times because I'm not crazy; I know I can't be ready for everything.

We don't want anyone hoarding (or gouging). However keeping TP enough for 2 weeks when supply was ample, whould have prevented this ever being an issue, and no gouging needed. TP production has never been an issue, the system shock of people panic buying (too much) all at once was. People aren't shitting more than before.

I have about a month's supply of TP at home, and have only bought 10 rolls since this whole thing began. I am not a prepper nor a hoarder. I just like having a buffer of things I like not being without. There's a miniscule opportunity loss of storage and sunken cost, but I'm not spending any more than I would with just-in-time purchasing.

> If we allowed price gouging, I might seriously keep a few extra boxes of masks ready for selling to others the next time this happened. I like money. I have some shelf space. The only question is will prices go high enough to justify using it.

Great argument for not allowing price gouging then.

Re: Economists who defend disaster profiteers are wrong

#274

Post by wccrawford »

alexmingoia wrote: post #4

Increased production doesn’t occur because the economics don’t work, it doesn’t occur because there’s just no way to physically ramp up production that fast. That’s not really a critique of the economics. If production could be increased that fast the manufacturers would. An important point the article didn’t address is that high prices direct resources to more important uses. If prices are very high then hospitals m…

Actually, there was a post on HN from a guy who makes medical masks that isn't ramping up production as much as he can. The article's headline was basically just that, trying to get as many clicks as possible.

The real story was that last time there was a shortage, he did ramp up production. But after the shortage ended, his customers dried up immediately and he was left with paying unemployment for all the new workers that he had to fire now. It nearly destroyed his business, and he's not making the same mistake again.

His masks cost 10c where Chinese-made masks cost 2c. There's no way to get hospitals to keep him in business during non-crisis times at 5x the price. If there were, he'd do it.

So it isn't just inability to physically increase production. Economics factors in heavily, too. If he could charge more for these masks, he could bank that extra and pay the unemployment (and other business expenses from ramping down) after this crisis ends.

Re: Economists who defend disaster profiteers are wrong

#275

Post by h0l0cube »

p1necone wrote: post #241
h0l0cube wrote: post #189

Earlier quoted context omitted.

> these sorts of talks with laymen are bad ideas Condescension by experts is one means by which bad ideas can promulgate, and lead to bad policy. Everyone you speak with is a potential voter, and at the end of the day, badly or uninformed voters are bad for democratic outcomes. To go back to your original criticism, asking for background information is a lazy dismissal wasn't a fair assessment. Is wasn't a dismissal…

This tiresome blatant gish galloping conservative bullshit has been getting more and more common on hacker news lately. I wonder if it's because we're getting close to a US election. I find it deeply concerning because hacker news is generally a bastion of intellectually honest discussion (at least relative to the rest of the internet).

From what I've seen, HN has always been prone to partisanism. However, it is well moderated, and frequented by polymaths and domain experts that can keep in check those arm-chair wannabes (like myself), which is why I keep coming back.

> conservative bullshit

I think it helps to be mindful to not fall prey to ideology through opposition. Visualizing your interlocutor as an enemy gives no room for either you or them to grow in knowledge, and encourages bad faith dialogue... IMHO :)

Re: Economists who defend disaster profiteers are wrong

#276

Post by simonh »

imtringued wrote: post #220
roenxi wrote: post #190

Earlier quoted context omitted.

Eugenics had wide scientific support; it wasn't a horror when they proposed it. A seriously high minimum wage ($100,000/year for example; no other policy changes) would probably lead to a period of horror and mass unemployment. Possibly famine, I don't know what would happen if it no longer made economic sense to employ people to transport food around. Maybe they are already high earners, what do I know. A minimum wa…

Other people think the concept of price controls is tied to morals when it comes to minimum wages. When you consider our democratic system it becomes pretty obvious. You need slightly more than 50% of the votes. So the minimum wage is picked so that at least 50% of the population earns more than it. Therefore by definition a minimum wage chosen by politicians is going to set it to a really low value that will then be…

I used to believe this, back in the 80s I was a true Thatcherite believer. I still largely am, but some of the things I believed back then have turned out to be false, and the dire economic impact of minimum ages seems to have turned out to be one of them. This is why Conservative governments in the UK have been carefully ratcheting up the minimum wage here over the last decade or so.

A feared employment apocalypse at the low end has stubbornly refused to appear, at minimum wage levels that would have been considered reckless not long ago, and it's proved a useful policy coup neutralising a key Labour campaigning point.

Re: Economists who defend disaster profiteers are wrong

#277

Post by Leherenn »

roenxi wrote: post #259
Leherenn wrote: post #250

Earlier quoted context omitted.

I think the issue here is that we are talking about toilet paper, which is not really vital. In this case, having people priced out for say 2 weeks before prices come down again is not the end of the world. If we were talking about something really vital like food, those same 2 weeks become unacceptable. It's a good thing that it did not happen at the same scale for food (supply is more elastic? demand is less elasti…

You're not considering what I feel to be the most important point here. The immediate result of price signals is huge amounts of money will become available to anyone who is producing a scarce good. If something in your scenario (government, public pressure, whatever) interferes with the market then the people who produce food will no longer be awash with money and will not produce more anywhere near as fast. Even if…

But you can't grow wheat or raise chicken in 2 weeks, no matter how much money you pour into it.

I think our divergence in opinion comes from how much extra incentives to produce there is between the normal margins and the supply-constrained margins and how helpful that incentives is.

My hunch is that as long as there is a profit to made, extra demand will be met as soon as possible. Massively increasing the profit would help only if it would go towards raising food faster, which I think is not something that can be meaningfully improved in the time-frame we are talking about. Yours seems to be that it would help us get food faster. I might be totally wrong, so any data is welcome.

Note that I am talking about a case where raising margin would be forbidden, not raising price if it is necessary to increase production. Also, this is only for the case where supply and demand did not change long term, and the current demand spike is caused by irrationality (panic buying or people trying to profiteer from panic buyers).

Re: Economists who defend disaster profiteers are wrong

#278

Post by slfnflctd »

sparkie wrote: post #231
kaitai wrote: post #61

Earlier quoted context omitted.

Yep. The flaws of that system are becoming clearer and clearer, not that you'd see it from the responses you're getting. "If people can't pay for housing, they deserve to be homeless! If people can't pay for healthcare, they deserve to be sick and die! Without a profit motive, we cannot do anything for our fellow man! It would be immoral to serve without profit, or to look for the greater profit to society!" Housing…

Who is "we?" I have a question, if you don't mind answering. What are you doing personally to help the homeless and less fortunate than yourself? I get that it is easy to sit behind a keyboard and complain that other people aren't doing enough. The way to help people isn't to demand that other people pay more, but to use your own resources for the causes which are most important for you. Simply giving more money to t…

You just wrote out this long, politically charged comment basically asserting your opinion as fact, which appears to boil down to "socialism bad". Don't you think most people here have made up their minds on that issue and are tired of watching endless fights about it? We aren't on slashdot.

Also, this:

> the only way that humans have ever lifted themselves out of poverty is through productive labour and innovation

...is utterly false. Maybe somewhat true in the general case (although less and less so even there in more recent history), but not at all for individuals. People and governments have helped other people and governments many times without asking for anything back.

Re: Economists who defend disaster profiteers are wrong

#279

Post by Proven »

First, there's no disaster profiteering in free market. It's business as usual, but with higher prices due to higher demand.

Second, if you want to complain about inappropriate and outright fraudulent behavior, take a look at the Covid-related healthcare-rationing "guidelines" in Spain and Canada that withdraw supply to paying customers based on their age. That's not only immoral but it violates commitments to those who were forced into these contracts with the State.

If I raise the price of face masks that you can still buy (or not, up to you), that's nothing but goodness. On the other hand when the state kills off the supply of healthcare after charging you for it according to prices and conditions you hadn't even agreed to, that is the worst form of profiteering

Re: Economists who defend disaster profiteers are wrong

#280

Post by asdkjh345fd »

kortilla wrote: post #145
hannasanarion wrote: post #70

Earlier quoted context omitted.

Hoarding isn't the (entire) problem, a bigger issue is the sudden shift in consumption from commercial to consumer. Nobody is pooping in office buildings, schools, or shopping centers anymore, everyone is doing it at home. Producers that uses to sell 50/50 consumer to commercial are now selling 90/10 in favor of consumer and they can't reconfigure their production lines fast enough. https://marker.medium.com/what-eve…

And $20/roll would expedite the changeover pretty quickly.

Not if the producers believe that this is temporary and will go back to 50/50 again soon. It isn't worth the cost of making big changes just to have to change back again in a month.
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