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Economists who defend disaster profiteers are wrong

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Re: Economists who defend disaster profiteers are wrong

#381

Post by wavepruner »

wccrawford wrote: post #274
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 worke…

During the Great Recession my industry was hit particularly hard (environmental engineering, pollution remediation). I remained on unemployment for the full 2 years while pursuing about 5 real job opportunities per year. 80% of the time employers told me they were very impressed, but decided not to hire, or promote internally, because they didn't want to be on the hook for unemployment if work dried up again.

This is an anecdote, but if unemployment didn't exist I would have had a decent paying job within 4 months of being laid off. IMO this is preferable to being trapped in an unemployment system with terrible incentives.

I ultimately changed industries after realizing that cleaning up pollution is the last thing people will pay for during economic downturns.

Re: Economists who defend disaster profiteers are wrong

#382

Post by CryptoPunk »

jrumbut wrote: post #253
CryptoPunk wrote: post #156

Earlier quoted context omitted.

Market participants are unable to deliberate on every policy position of every candidate that they have to choose from in elections. Elections as currently administered are highly limited in their ability to produce good collective judgments, so the fact that politicians support sonething is no indication that it's socially beneficial. If the democratic process produced socially optimal governance decisions, no democ…

The non-market solution doesn't solve the fundamental problem it prevents the problem from doing maximal damage in a time sensitive situation. It takes time to build and staff and supply a mask factory, meanwhile you risk the scarce (in the best of times), skilled clinicians getting sick en masse or abandoning their jobs. Market solutions work when there is no coercion besides price, unfortunately viruses won't take…

That kind of extreme situation can be dealt with far more targeted regulatory responses than price controls, like simply commandeering private supplies when medical professionals need them during a critical shortage, and some monopolist is refusing to sell them.

And in most situations, money can solve the problem, and get the essential item in the hands of those who need them. Those with stockpiles typically have them in order to sell them during a shortage. Not pointlessly hoard them and forego the profit earning opportunity.

The long-term damage of anti-price-gouging laws is fewer stockpiles to prevent shortages from emerging during future crises, and a slower ramp up of production and distribution when a shortage does emerge.

Re: Economists who defend disaster profiteers are wrong

#383

Post by sparkie »

charlesu wrote: post #290
sparkie wrote: post #231

Earlier quoted context omitted.

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 and the poster above you have fundamental differences in how you understand the world. He seems to believe in a world of abundance and you seem to believe in a world of scarcity, not simply limited resources but literal scarcity. Why do you take it as fact that there isn't enough to go around? Are you sure that's the case?

I'm not talking about abundance versus scarcity. I believe that resources are abundant enough (we're a long way from "overpopulation"). I'm merely talking about how the resources are used: ie, who earns their keep and who expects to be kept through other people's hard work.

Ultimately, if you want food on the plate, you either need to grow the food, or you need to trade some of your time or other commodities with somebody who has already grown it. The food won't grow itself. (Well, some will naturally, but in very limited quantities compared to the harvests that can be made through deliberate labour).

Similarly, houses won't build themselves. Somebody needs to labour to take the raw materials gathered from the earth and turn them into shelter. If this isn't you, why would you think you "deserve" to be sheltered?

Nobody is entitled to other people's labour. If you consider the case where one person takes 100% of the proceeds of another person's labour, we can safely say that this relationship is one of a master and a slave. If this is the case, what percentage of another person's labour can be taken where they are no longer a slave? Is it 60%? 50%? 40%? Who knows - some arbitrary figure. Of course the correct answer is 0%. Only if you own the full reward of your own labour are you a free person.

Re: Economists who defend disaster profiteers are wrong

#384

Post by [deleted] »

Consultant32452 wrote: post #378
MisterBastahrd wrote: post #363

Earlier quoted context omitted.

Because he bought them all. This is why, in states where disasters are probable due to natural issues (hurricanes, earthquakes), price gouging is a crime. Not only is it a crime, but it is one where there is full bi-partisan support for the continuance of the law. If you want to put a smile on the face on someone suffering from calamity, first help them, and then arrest the bastard who tried to profit off of it. The…

If the gouger actually bought them all then you have a monopoly, which is a different problem. The gauger, instead, bought some. So did many other people. The difference is he's willing to sell his. That's the value to me he's providing. Could you retry your analysis with this corrected information?

[deleted]

Re: Economists who defend disaster profiteers are wrong

#385

Post by MisterBastahrd »

Consultant32452 wrote: post #378
MisterBastahrd wrote: post #363

Earlier quoted context omitted.

Because he bought them all. This is why, in states where disasters are probable due to natural issues (hurricanes, earthquakes), price gouging is a crime. Not only is it a crime, but it is one where there is full bi-partisan support for the continuance of the law. If you want to put a smile on the face on someone suffering from calamity, first help them, and then arrest the bastard who tried to profit off of it. The…

If the gouger actually bought them all then you have a monopoly, which is a different problem. The gauger, instead, bought some. So did many other people. The difference is he's willing to sell his. That's the value to me he's providing. Could you retry your analysis with this corrected information?

Doesn't matter if he bought all or some. If he is attempting to profit off of a disaster, he will be seeing a fine or jail time in plenty of states.

Re: Economists who defend disaster profiteers are wrong

#386

Post by CryptoPunk »

michaelmrose wrote: post #224
CryptoPunk wrote: post #152

Earlier quoted context omitted.

It doesn't map to desire perfectly, but it does generally. If anyone truly needs a mask, (e.g. a delivery driver delivering packages to customers, a doctor, a nurse), that represents an economic need for whatever service they provide. Their employer will be able to charge a high price for their service, and afford to pay a high price for PPE for them. Even when the mapping is imperfect, the fact that the rich guy was…

>which promotes more productive behavior from society at large. Greed is good is an ideology for the morally impaired with limited attention span. A relatively small differential in wealth and large differential in social standing is arguably enough to achieve maximum "productive" behavior after which diminishing returns are had. As proof observe many European nations that are almost as productive wherein the wealth…

Greed is not good. Productive behaviour is good. Market economies encourage people to be productive in order to satisfy their self-interest.

Defining pursuit of self-interest as greed is the type of ideologically motivated moralizing that leads to people ignoring rational arguments and the evidence on what types of laws work and what don't.

>>As proof observe many European nations that are almost as productive wherein the wealth of most practitioners of most professions tops out much lower than their US counterparts and yet they produce similarly to our citizens.

1. The U.S. is significantly more productive than Europe on a per capita basis.

2. Even if 1 weren't true, your argument would prove nothing, as there are a vast array of differences between the EU and the US that could explain your observation. Your 'proof' is nothing of the sort. It's lazy confirmation bias. The empirical evidence, in the form of analysis on large datasets, strongly suggests being more market-based is associated with more rapid economic development. For example see this study: https://web.archive.org/web/20170821004405/http://ime.bg/upl... There's no evidence of any threshold where that benefit diminishes. These empirical observations are strongly supported by the basic economic theory.

Re: Economists who defend disaster profiteers are wrong

#387

Post by valuearb »

MisterBastahrd wrote: post #363
Consultant32452 wrote: post #322

Earlier quoted context omitted.

There's none available to purchase at the old, lower price. So he's providing value to me, someone who wishes to buy one.

Because he bought them all. This is why, in states where disasters are probable due to natural issues (hurricanes, earthquakes), price gouging is a crime. Not only is it a crime, but it is one where there is full bi-partisan support for the continuance of the law. If you want to put a smile on the face on someone suffering from calamity, first help them, and then arrest the bastard who tried to profit off of it. The…

Hoarders aren’t selling theirs, he is. If he didn’t exist, more hoarders would have critical supplies.

Re: Economists who defend disaster profiteers are wrong

#388

Post by valuearb »

goatinaboat wrote: post #283
wccrawford wrote: post #274

Earlier quoted context omitted.

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 worke…

His masks cost 10c where Chinese-made masks cost 2c. Once you factor in the cost of this crisis as an externality, the cost of Chinese-made anything skyrockets. Outsourcing is a bait-and-switch, always was.

Coronavirus wasn’t created by cheap Chinese manufacturing.

Re: Economists who defend disaster profiteers are wrong

#389

Post by downerending »

wpietri wrote: post #364
WalterBright wrote: post #217

Earlier quoted context omitted.

> Neither do high prices. Sure they do. Look at what happens when an oil refinery blows up (happens now and then). Price for gas goes up until demand matches supply. Billionaires don't hoard gas. Gas prices fluctuate daily. This is all from matching supply with demand. The same goes for airline seats and the price of oranges. I don't think I ever pay the same price twice for oranges at the supermarket.

Gas and oranges are hard to hoard; airline seats are impossible. And your examples are all from normal times, not major disasters. None of what you say is relevant to disaster profiteering.

Disagree. Gasoline is perhaps the quintessential example of disaster price "gouging". Ask anyone in a hurricane zone.

Personally I have mixed feelings: If the prices don't go up, the incentive to ramp up production is pretty weak. It does, though, seem inhumane that increased prices can have an outsized bad effect for the very poor in disaster situations.

Re: Economists who defend disaster profiteers are wrong

#390

Post by dhimes »

michaelmrose wrote: post #218
roenxi wrote: post #179

Earlier quoted context omitted.

Mr. Mouse has a good take on this but there is a second perspective that is worth considering: If we set up a dog-eat-dog world where only money matters, why would a billionaire hoard unneeded masks? They know that they can just buy what they need when the need it. The only people with incentive to hoard are poor and vulnerable people because they know they won't be able to afford masks when they run out. Entrepreneu…

This assumes that people actually behave rationally. Do we have actual numbers on rich people buying TP during the present crisis? If most people including the rich are going to hoard anyway a rising price just transfers more money to sellers when many need it most. Worse it incentivizes people to buy for resale if the price is trending upward. TP selling for 200% that is headed to 400% shortly is a smarter buy than…

This assumes that people actually behave rationally.

Indeed. Just the idea that TP is the topic of interest and not, say, food or medicine proves this. You don't need TP. A lot of the world don't even use TP. You can, instead, wash.

But there's not much you can do to replace eating.

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