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Economists who defend disaster profiteers are wrong

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Re: Economists who defend disaster profiteers are wrong

#391

Post by erik_seaberg »

throwanem wrote: post #367
DuskStar wrote: post #332

Earlier quoted context omitted.

> There should be a special word for the moral delusion that markets exist in an abstract philosophical vacuum and price signals are somehow more important than people's lives. From my perspective, there should be some word for the delusion that equitable distribution of a smaller, price-fixed supply is better than prioritized distribution of a larger, price-gouging supply. The lack of masks that not allowing higher…

In an abstract philosophical vacuum, where manufacturers can instantaneously increase production of arbitrary goods to an arbitrary extent, such an argument makes sense. In the real world, which recently has provided an ample sufficiency of evidence that manufacturers can do no such thing because the process depends on specialized machinery that takes considerable time to manufacture in its own right, such an argumen…

Manufacturers could have bought a lot of extra machinery knowing it's hardly ever needed, but they didn't. Why? During a crisis it's illegal to raise prices enough to fully pay off all that machinery.

Re: Economists who defend disaster profiteers are wrong

#392

Post by AndrewUnmuted »

danans wrote: post #123
AndrewUnmuted wrote: post #96

Earlier quoted context omitted.

Eugenics and wage “protections” like minimum wage are both tied to the same racist underpinnings. The minimum wage was established to price out black workers.

Lots of rights enjoyed by all today in th US - the most important being voting - were originally established specifically at the exclusion of people of color and women. The problem wasn't the rights themselves, it's that they were purposely offered to white men only. Therefore it's deceptive to attack the minimum wage as being any more racist in origin than the right to vote is. Much of the law has deeply racist orig…

What about the person who wants to sell their services at a rate lower than what the government has deemed allowable? Where are their rights in this scenario?

Re: Economists who defend disaster profiteers are wrong

#394

Post by perl4ever »

sokoloff wrote: post #266
perl4ever wrote: post #106

Earlier quoted context omitted.

They can raise prices moderately on everything to make up for it, and/or stock things that are slightly less appealing in normal times to slow turnover and bias sales towards those more in need. For instance, the pasta section was about 5% full and almost entirely things like whole wheat, cauliflower gluten-free, or turmeric. But that's fine with me. Your tone is that this is not the optimal solution and some misguid…

I think the core belief is that supply and demand is a force that can actually cause more supply to come into a market where there is imbalance. IOW: rather than curtail the expression of demand via rationing, actually increase the supply. If the marginal profit on TP is $0.10/roll and the price is not allowed to increase in time of excess demand, you’re likely to see factories optimize to squeeze every efficiency ou…

"I think the core belief is that supply and demand is a force that can actually cause more supply to come into a market"

Everybody believes that, in general. But in the short term, the elasticity of supply with respect to price approaches zero. If we ramped up production though, it would be too late, and then there would be a glut.

Re: Economists who defend disaster profiteers are wrong

#395

Post by mrguyorama »

Nerevarine76 wrote: post #305
ccmcarey wrote: post #229

Earlier quoted context omitted.

> The economy needs to have good sold at a profit Not for things that do not need to make a profit. See: essentials like healthcare, housing, and basic food items.

Why would anyone work to acquire, sell, and as a result create a competitive market for those items if they can't make any money off of it? Preventing sellers from profiting off of 'essentials' and setting prices has created some of the worst food shortages in history.

Ah, I was unaware the world of open source software didn't exist

Re: Economists who defend disaster profiteers are wrong

#396

Post by AndrewUnmuted »

danans wrote: post #138
logicchains wrote: post #132

Earlier quoted context omitted.

That's a completely different thing. The minimum wage wasn't originally only offered to white people: it was mandated for everyone, for the purpose of rendering those with lower-paying jobs (people of color, immigrants) unemployed, or preventing them from competing with whites. The briefing paper at https://www.cato.org/sites/cato.org/files/pubs/pdf/bp017.pdf discusses this. "The law provided that all federal constru…

> it was mandated for everyone, for the purpose of rendering those with lower-paying jobs (people of color, immigrants) unemployed So it was mandated for "everyone", but by your own description, not really, because it adjusted another variable - who had a job - by race, which is practically the same thing as being racially exclusionary. This is not so different to how black people in theory got the right to vote afte…

No, it is very different from that. The right to vote in that case was denied purely based upon racial boundaries - it's not like poor white people couldn't vote in the South.

Minimum wage is much more underhanded than that, because it was passed in the name of fairness but it was really just to protect entrenched workers against an incoming wave of competition.

These labor protections in the US are what initially got so many working-class white Americans on board with the progressive agenda in the first place.

Re: Economists who defend disaster profiteers are wrong

#397

Post by ceejayoz »

missedthecue wrote: post #343
ceejayoz wrote: post #328

Earlier quoted context omitted.

The idea that wealth inequality is just due to it going to "capable hands" is a hell of an unsupported assertion. "Pissing it away" is also known as buying things, which drives economic growth. The poor spend every penny they make, and this is generally considered good for the economy.

Investment drives growth, not consumption.

Investment requires returns, which mean people have to consume the resulting product, be it goods or services.

Re: Economists who defend disaster profiteers are wrong

#398

Post by Chris2048 »

MisterBastahrd wrote: post #385
Consultant32452 wrote: post #378

Earlier quoted context omitted.

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.

Should for-profit grave-digging be illegal too?

Re: Economists who defend disaster profiteers are wrong

#399

Post by ceejayoz »

Kaiyou wrote: post #347
ceejayoz wrote: post #328

Earlier quoted context omitted.

The idea that wealth inequality is just due to it going to "capable hands" is a hell of an unsupported assertion. "Pissing it away" is also known as buying things, which drives economic growth. The poor spend every penny they make, and this is generally considered good for the economy.

Buying stuff doesn't facilitate growth. Look at all the toilet paper people buy recently. Where's your growth?

I'm sure toilet paper manufacturers are doing OK right now.

The growth in that sector is swallowed up by the overall hard-stop of the entire economy.

Re: Economists who defend disaster profiteers are wrong

#400

Post by yawaramin »

nickff wrote: post #167
yawaramin wrote: post #134

Earlier quoted context omitted.

> Speaking as an economist, I tend to get nervous when other economists talk about circumstances where "morality trumps economics." Some examples where morality trumps economics that might help to calm you: - Child labour is illegal in the civilized world - Slavery is illegal in all or most countries (despite slave labour being more, um, economical than paid labour) - Emergency services like fire, police, paramedics…

In many countries, child labor wasn't banned because of moral reasons, it was banned as an anti-competitive measure against un-mechanized factories. Slavery was enforced (and subsidized) by many governments; it wasn't exactly a creature of the free market. Segregation was similar. Indentured servitude may be a different matter, though it brings up some more complicated questions. "Not demanding payment up front" has…

> In many countries, child labor wasn't banned because of moral reasons, it was banned as an anti-competitive measure against un-mechanized factories.

OK, then child soldiers. Or chemical weapons. Pretty much anything outlawed by the Geneva Convention–all economical ways to wage wars, trumped by morality. Not as anti-competitive measures against killer robots.

> I've gone to many nice restaurants where they didn't charge me up front,

Restaurants also typically don't risk their lives for you, so not really relevant.

> You say that companies should expect profits to fall,

That's what I said.

> but do you expect the companies to drive themselves into the ground (thus leaving their employees unemployed) in an attempt to do a little to help?

That's not what I said. It helps if you stick to what I actually said.

> Most companies spend about 50% of their revenue on labor, and have a profit of less than five percent.

We're not talking about most companies. We're talking about big industrial PPE manufacturers like 3M, which reported net income of about $5b dollars in 2018, and because of accounting tricks,[1] probably under-reported their income. They have a profit margin of about 50% for at least the past five years.[2]

> That means that a 10% increase in labor costs (think overtime)

We're not talking about a uniform, across-the-board 10% increase in labour costs, we're talking about targeted cost increases specifically for PPE manufacture.

> they really can't afford to reduce their margins much, and remain an extant firm.

Based on the actually relevant numbers, it looks like they'll be just fine.

[1] https://www.forbes.com/sites/greatspeculations/2020/02/26/hi...

> You say we shouldn't gamble our lives on the continued decency of for-profit corporations, but I have more confidence in their ethics than those of the common man.

I'm just curious, who do you think makes up these for-profit corporations, some kind of special saints? As opposed to 'common' people?

[2] https://ycharts.com/companies/MMM/gross_profit_margin

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