Economists who defend disaster profiteers are wrong • Hacker News Board

Re: Economists who defend disaster profiteers are wrong

#441

Post by Consultant32452 » Tue, Apr 14, 2020, 8:14 PM UTC

jbay wrote: post #437

Consultant32452 wrote: post #420

Earlier quoted context omitted.

Do you believe that, absent price gougers, I would be able to walk into Home Depot, CVS, Walmart, etc. and buy some N95 masks for my personal use? I don't think that's likely, so wherever you were heading with that is irrelevant. I want to be clear I'm intentionally separating two things. The gouger is making product available on the market where otherwise there would be none. The higher price discourages hoarders or…

> The higher price discourages hoarders or others with lower needs. Others with lower means, you meant?

With central planning, resources go to the politically connected. So it's no different, the poor are reliant on better connected and/or wealthier people to provide them with some resources.

Pricing (which includes 'gouging') is not perfect, but it's better than central planning, price fixing, and quotas at efficient allocation of resources. At the very least it provides a 'wisdom of the crowds' affect where anyone with enough money can reallocate some of the resources to a location of need that might lack visibility to the hand full of people that would hypothetically be centrally planning all the resource allocation.

Re: Economists who defend disaster profiteers are wrong

#442

Post by jbay » Tue, Apr 14, 2020, 8:18 PM UTC

Consultant32452 wrote: post #441

jbay wrote: post #437

Earlier quoted context omitted.

> The higher price discourages hoarders or others with lower needs. Others with lower means, you meant?

With central planning, resources go to the politically connected. So it's no different, the poor are reliant on better connected and/or wealthier people to provide them with some resources. Pricing (which includes 'gouging') is not perfect, but it's better than central planning, price fixing, and quotas at efficient allocation of resources. At the very least it provides a 'wisdom of the crowds' affect where anyone wi…

Wait, who was proposing or even talking about central planning in this thread? I think you're the first. I was going to propose we allocate resources by sacrificing goats to the thirteen forgotten gods of the underworld, and then interpret their bones for wisdom.

I just wanted to clarify that when you said higher prices discourage those with lower needs, what you really meant is that it discourages those with lower means-weighted-needs. Which is to say, it discourages the desperate-but-poor, rebalancing demand toward the less-desperate-but-more-wealthy.

Re: Economists who defend disaster profiteers are wrong

#443

Post by Consultant32452 » Tue, Apr 14, 2020, 8:30 PM UTC

jbay wrote: post #442

Consultant32452 wrote: post #441

Earlier quoted context omitted.

With central planning, resources go to the politically connected. So it's no different, the poor are reliant on better connected and/or wealthier people to provide them with some resources. Pricing (which includes 'gouging') is not perfect, but it's better than central planning, price fixing, and quotas at efficient allocation of resources. At the very least it provides a 'wisdom of the crowds' affect where anyone wi…

Wait, who was proposing or even talking about central planning in this thread? I think you're the first. I was going to propose we allocate resources by sacrificing goats to the thirteen forgotten gods of the underworld, and then interpret their bones for wisdom. I just wanted to clarify that when you said higher prices discourage those with lower needs, what you really meant is that it discourages those with lower m…

The other alternatives proposed all over this thread such as purchase quotas, price fixing (stopping gouging), etc. are all central planning solutions. And those types of solutions are worse at efficient resource allocation than pricing and are less likely to get resources where they're needed most regardless of means or desperation.

Pricing spreads the capability of resource allocation around. In the central planning model the poor desperate person is reliant on a tiny group of central planners to allocate them some resources, and the central planners may not see that particular poor/desperate group. With the pricing model, anyone with the means can allocate resources where they see a need. In both scenarios the poor are reliant on someone else to allocate them resources. In the pricing model, the poor person has a better chance of being seen by at least someone with the means to make it happen.

Re: Economists who defend disaster profiteers are wrong

#444

Post by yawaramin » Tue, Apr 14, 2020, 8:30 PM UTC

lxmorj wrote: post #431

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…

Your penultimate point doesn't address that this isn't about expectations. It's asking companies to actively cause their own profits to fall. Raw material prices are being bid up - but even assuming you fix those prices somehow - you can't price fix labor prices while scaling up. Most production companies can't scale without running OT or hiring new employees, both of which will drive cost-per-unit up significantly.…

> Smaller companies or more specialized ones would have to decide to increase production to their own detriment. Some might do that out of goodwill, but your last point correctly calls that out for the gamble it is.

There is no gamble here. Maybe you're misunderstanding the article but again here is what it says:

> Ordering large supplies at fixed prices is the right policy.

Emphasis: ordering is the suggested policy. Not forcing companies to fill orders. Companies able to fill those orders will do it because those are the only orders that make sense for their scale. Small companies unable to ramp up production will produce what they can and fill smaller orders that make sense for their scale.

Re: Economists who defend disaster profiteers are wrong

#445

Post by fatbird » Tue, Apr 14, 2020, 8:36 PM UTC

someguydave wrote: post #405

fatbird wrote: post #353

Earlier quoted context omitted.

The field of moral philosophy has extensive literature on exactly this subject. The NYTimes has an 'ask an ethicist' column. Every hospital has an ethics board with prepared guidelines on patient triage in times of crisis. That the accepted answer to this question has become "who has the most money?" is a victory for... well, the people with the most money, so I guess we can call this a sterling example of the effect…

The only alternative to “highest bidder wins” is “third party decides”. If people need charity, seeking that charity should be a private matter, not one enforced out the barrel of a gun by uninformed third parties.

Except the whole point of human governance is to delegate that enforcement to a third party that is a just and neutral arbiter. Unless you want to revert to a state of nature and anarchy without laws or money, you're going to have that third party, and if you have it, then you have other options than "highest bidder", which is itself a value choice enforced on other, non-consenting citizens at the the point of a gun.

Re: Economists who defend disaster profiteers are wrong

#446

Post by downerending » Tue, Apr 14, 2020, 8:36 PM UTC

WalterBright wrote: post #428

downerending wrote: post #389

Earlier quoted context omitted.

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.

What happens in a hurricane zone (or used to happen until laws were passed against it) is everyone outside the zone with a pickup truck and a gas can would fill the can with gas and drive it into the zone and sell it at a profit. This caused a huge hue and cry about how terrible it was. So the law clamped down on it. Now people in a hurricane zone get no gas while they wait around for the government to provide some.…

Apparently it's easier to downvote than to suggest a workable alternative.

Per Sowell, there is no cosmic justice, and pretending so just makes things worse.

Re: Economists who defend disaster profiteers are wrong

#447

Post by Nursie » Tue, Apr 14, 2020, 8:39 PM UTC

someguydave wrote: post #324

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…

> how can you ethically defend everyone not getting a minimum ration To me, the fairest way to distribute any good is to the highest bidder. If someone is truly desperate for food, they will find a way to get the money to pay for it. I would rather that food be instantly available to that highest bidder with a true need, rather than having to jump through some kind of Soviet bread line to get their “ration”. Are you…

Historically ignorant and hysterically unethical.

This is one of the saddest things I've ever seen on HN.

Re: Economists who defend disaster profiteers are wrong

#448

Post by Kaiyou » Tue, Apr 14, 2020, 8:41 PM UTC

Infinitesimus wrote: post #409

Kaiyou wrote: post #355

Earlier quoted context omitted.

Actually, having more money means that your life is more valuable. Just like a sack full of gold is more valuable than a sack full of broken glass. It's just people get all emotional when applying the same concept to humans. Is it moral to replace broken things instead of trying to fix them, considering that fixing will be more expensive and the thing might just break down again after a while anyway? That's not a que…

Hmm, are you theorizing or do you believe these things? For instance, do you believe your life to be worth less than that of everyone else who has more money than you? What if that money was inherited and they didn't work a day in their lives? What about the life is say, Nikola Tesla who didn't have much money but laid foundations upon which a lot of our world is built today? Is the person who negotiated for more mon…

I'm observing reality and reaching conclusions.

But I'm not viewing things as fine grained as you are, but more fuzzy. A hundred bucks are basically nothing, but if I'm a doctor and have to decide whether to work for someone paying me a thousand dollar per hour or for someone paying me a thousand dollar per day, who am I going to choose to work for is obvious. If the difference in money isn't big, than things aren't as obvious.

I don't know much about what Nikola Tesla did, but maybe it's similar to someone having failed to negotiate adequate compensation. Which in turn is similar to someone getting killed and having his wealth outright stolen. The outcome is kinda the same: someone who didn't create the wealth reaps the benefits. Here's the thing, though, all said and done it doesn't matter who created the wealth, but who has it. Or let's rephrase that. Between the guy who cured cancer and the one who killed that guy, but got all the research results. Does it really matter to you who sells you the cure as long as you get the cure, if you suffer from cancer? Sure, there's injustice and all that. But does it really matter enough for you to not buy the cure for cancer from the murderer and die instead? And that is my answer. If you can amass wealth you are worth more. Even if you stole the wealth. You might then be hated and persecuted, but with enough wealth, that's not really that much of a problem, as there are few people not willing to buy the cure of cancer from a murderer if their life is on the line with no alternatives.

It's all about benefits in the end and wealth is a form of benefit. If you're good at gaining wealth, you're worth more than people who are bad at gaining wealth.

Re: Economists who defend disaster profiteers are wrong

#449

Post by Consultant32452 » Tue, Apr 14, 2020, 8:46 PM UTC

birdyrooster wrote: post #401

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.

Right and yet most everyone in this thread can agree that it wouldn’t be the most prudent use of it when there are other lives more at risk than yours.

In reality I have not gone out and purchased overpriced goods. I'm wearing a cloth mask when I go out.

In the hypothetical, you have no idea whose life is more at risk. And the central planners who want to implement price fixing, purchasing quotas, etc. do not have much if any more insight than you.

Re: Economists who defend disaster profiteers are wrong

#450

Post by WalterBright » Tue, Apr 14, 2020, 8:46 PM UTC

downerending wrote: post #446

WalterBright wrote: post #428

Earlier quoted context omitted.

What happens in a hurricane zone (or used to happen until laws were passed against it) is everyone outside the zone with a pickup truck and a gas can would fill the can with gas and drive it into the zone and sell it at a profit. This caused a huge hue and cry about how terrible it was. So the law clamped down on it. Now people in a hurricane zone get no gas while they wait around for the government to provide some.…

Apparently it's easier to downvote than to suggest a workable alternative. Per Sowell, there is no cosmic justice, and pretending so just makes things worse.

Yup. Designing an economy around denying fundamental human nature is doomed to miserable failure.