Economists who defend disaster profiteers are wrong • Hacker News Board

Re: Economists who defend disaster profiteers are wrong

#311

Post by Kaiyou » Tue, Apr 14, 2020, 1:05 PM UTC

michaelmrose wrote: post #222

AnthonyMouse wrote: post #133

Earlier quoted context omitted.

Someone who couldn't afford $20 for something that lasts more than a month? If this person exists it's because they place a below-average value on toilet paper, not because they don't have $20. And there aren't enough millionaires for their toilet paper buying habits to have a meaningful effect on the market unless they each start buying millions of rolls, which is a ridiculous hypothetical with no chance of really h…

Rolls of TP don't last a month in most households. They normally last 1 to 2 days. You either own a bidet or need to see a doctor.

I'm buying toilet paper about once every five years. Not sure how others manage to go through the stuff so quickly. On the bright side, I bought some last year, so I'm covered for a few years.

Re: Economists who defend disaster profiteers are wrong

#312

Post by Kaiyou » Tue, Apr 14, 2020, 1:09 PM UTC

kaitai wrote: post #56

alexmingoia wrote: post #44

Earlier quoted context omitted.

The more you have to exchange for something, the more you're foregoing other forms of consumption. If toilet paper cost you your entire budget, you wouldn't buy toilet paper at all. You'd buy food instead. In that way, prices redirect your consumption to higher priority things. That's what is meant by "more important."

Only if you have to think about money. What you point to is that poor and maybe middle-class people have to 'redirect' their consumption to 'higher priority things', which in some cases is equivalent to just going without. Insulin, rent, or food? Ah, just prioritize, honey!

If the problem is only poor people, maybe they should figure out how to, y'know, stop being poor. Or maybe the answer is for poor people to be pruned. Not sure what the incentives are for keeping poor people alive. If there aren't any, it's just irrational behavior.

Re: Economists who defend disaster profiteers are wrong

#313

Post by dsfyu404ed » Tue, Apr 14, 2020, 1:12 PM UTC

nicoburns wrote: post #260

roenxi wrote: post #227

Earlier quoted context omitted.

> This assumes that people actually behave rationally. There isn't an alternative. If you assume people behave irrationally you may as well send the army in straight away. People are often stupid but rarely irrational given what they can understand. There is pretty solid evidence that people with money are the ones who spend it rationally. And besides a private buyer's opinion of what is rational is just as valid as…

> There isn't an alternative. There is an alternative: distribute wealth. On aggregate people tend to behave a lot more rationally than individuals do. So if you spread the buying power as widely as possible then you get a more rational market.

>On aggregate people tend to behave a lot more rationally than individuals do.

Just delegating responsibility for resource allocation to groups of people is not a silver bullet.

"Aggregate people" tasked with distributing wealth (or taking wealth and converting it to some resource and distributing that) seems to be highly succeptable to holding onto more and more of that wealth over time for trickle down distribution within it's own organization.

Large nonprofits regularly come under fire for using too much of their income on their leadership and luxury fluff for themselves. Governments routinely spend their income paying themselves and paying for pork for their friends and paying for fluff instead of making people's lives good. Religions tend to amass more and more wealth until some sub-group tells them to shove it and historically this results in violence. You could fill libraries with the volume of work written about all the ways organizations become corrupted and self serving and fail to achieve their goal.

Re: Economists who defend disaster profiteers are wrong

#314

Post by Kaiyou » Tue, Apr 14, 2020, 1:15 PM UTC

coffeefirst wrote: post #73

lettergram wrote: post #66

Earlier quoted context omitted.

If they had allowed dynamic pricing then people who needed more would probably be willing to pay $10/roll of paper towels Vs the fixed $2/roll. They aren’t necessary for life, so setting fixed prices are why they need hard limits. Seems crazy to me we aren’t seeing a “free market” at play, where both inherently the stores “win” and the people receive the goods they need / can justify.

It's weird how in that scenario software engineers and lawyers always seem to "need" paper towels a lot more than laid off waiters do. It's as if there's something going on there that this reductionist model didn't account for.

If someone has to go without it, why can't it be poor people? Seems crazy to leave money on the table.

Re: Economists who defend disaster profiteers are wrong

#315

Post by treden » Tue, Apr 14, 2020, 1:19 PM UTC

Consultant32452 wrote: post #309

XorNot wrote: post #295

Earlier quoted context omitted.

There's a difference between price gouging and covering expenses. The guy buying up all the masks and reselling them for 10x the price is price gouging. He doesn't make anything. If a manufacturer ramped production and billed the current inventory to cover costs, then that's a very different thing. Of course all of this is why the Defense Production Act even exists. A perfect use of the DPA would be a mask manufactur…

>The guy buying up all the masks and reselling them for 10x the price is price gouging. He doesn't make anything. The guy buying up all the masks and reselling them for 10x the price is making availability, which is highly important in a crisis.

He's capturing availability, the manufacturer made the availability. There is no value-adding middle man role with a 10x value here (well value to anyone other than the middle man).

Re: Economists who defend disaster profiteers are wrong

#316

Post by jcranmer » Tue, Apr 14, 2020, 1:20 PM UTC

Consultant32452 wrote: post #309

XorNot wrote: post #295

Earlier quoted context omitted.

There's a difference between price gouging and covering expenses. The guy buying up all the masks and reselling them for 10x the price is price gouging. He doesn't make anything. If a manufacturer ramped production and billed the current inventory to cover costs, then that's a very different thing. Of course all of this is why the Defense Production Act even exists. A perfect use of the DPA would be a mask manufactur…

>The guy buying up all the masks and reselling them for 10x the price is price gouging. He doesn't make anything. The guy buying up all the masks and reselling them for 10x the price is making availability, which is highly important in a crisis.

The guy buying up all the masks and reselling them is likely buying them in similar markets to the people who he will be selling them to eventually. His net effect is likely going to be doing diddly squat to the availability.

Re: Economists who defend disaster profiteers are wrong

#317

Post by Robin_Message » Tue, Apr 14, 2020, 1:24 PM UTC

lukas099 wrote: post #301

asdkjh345fd wrote: post #280

Earlier quoted context omitted.

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.

It may incentivize them to invest in the ability to quickly change the ratio.

For a once every hundred years event? Probably not.

Re: Economists who defend disaster profiteers are wrong

#318

Post by Kaiyou » Tue, Apr 14, 2020, 1:27 PM UTC

XorNot wrote: post #310

Kaiyou wrote: post #306

Earlier quoted context omitted.

Willingness to pay is a pretty good indicator of importance, I think. Where this falls apart is ability to pay. But that's life. If you can't pay, you won't get what you want, no matter how important it may be. Expecting other people to cover for you is called entitlement.

What do you call it when you expect to be able to screw over your fellow man, and have the state's monopoly on violence protect you for it?

Reasonable.

Re: Economists who defend disaster profiteers are wrong

#319

Post by Symmetry » Tue, Apr 14, 2020, 1:28 PM UTC

nonidentified wrote: post #76

Speaking as an economist, I tend to get nervous when other economists talk about circumstances where "morality trumps economics." As a profession, we have a miserable track record on morality. Economists widely endorsed eugenics in the first half of the 20th century, for example. And many modern economists endorse a minimum wage, as eugenicists did then, but with even less regard for the harm it causes. Personally, I…

I think economists have done pretty well overall. It got termed the "dismal science" for opposing slavery in the 19th century ("They'll be more productive if they get paid") and generally being against imperialism ("Can't we just trade with them?"), being against the corn laws, etc.

And if I go look at the Wikipedia page Eugenics in America[1] and read through the bios of the first few supporters I can find I get Francis Galton (Polymath uninvolved in economics), John Harvey Kellogg (Doctor), Charles Davenport (Biologist), Henry H. Goddard (Psychologist), Harry H. Laughlin (Sociologist), Madison Grant (Conservationist), Karl Pearson (Biostatistician), Alexander Graham Bell (Inventor), David Starr Jordan (Biologist), Luther Burbank (Botanist), and Margaret Sanger (Feminist).

I don't want to say that economists are blameless here. Henry Rogers Seager famously used eugenics as a reason for a minimun wage writing “The operation of the minimum wage requirement would merely extend the definition of defectives to embrace all individuals, who even after having received special training, remain incapable of adequate self-support.”

But overall it seems that when economists disagreed with the predominant intellectual milieu they've mostly been right and they've mostly only been badly wrong when they've followed along with it.

[1]https://en.wikipedia.org/wiki/Eugenics_in_the_United_States

Re: Economists who defend disaster profiteers are wrong

#320

Post by invalidOrTaken » Tue, Apr 14, 2020, 1:28 PM UTC

wpietri wrote: post #162

nostromo wrote: post #151

Earlier quoted context omitted.

Isn't your comment a critique of all free markets? Food is largely a free market in the US. A billionaire could buy a billion dollars worth of beef tomorrow. But they don't, because why would they? And in fact, markets have done a better job of feeding people than any centralized planning system has. I don't see why masks would be any different.

Free markets are not magic sparkle ponies. They're good at certain kinds of optimization. They're bad at others. Disasters are a known case when markets fail.

Well they'll certainly fail next time, that's for sure.