Earlier quoted context omitted.
>>The problem with this oft-used dogmatic argument is that it’s pure claim and no evidence. The anti-money position you're espousing is the one that's dogmatic. It ignores what a century of economic scholarship says about how prices work to measure shortages and direct resources to alleviate them. It belies an anti-profit cognitive bias: https://digest.bps.org.uk/2017/08/04/we-have-an-ingrained-an... >>The problem wi…
I appreciate the reply and the links. FWIW, I think trying to paint my views as anti-money and anti-profit is a straw man that is extreme and doesn't effectively respond to what I said. I believe that competition and profit does do what you're saying sometimes . I know there's evidence that it works sometimes . I may be perfectly comfortable saying it works most of the time. But there's also historical evidence that…
>>You're glossing over that by ignoring externalized health and environmental concerns, among other things. The market might be stronger if it's left unchecked, but that's not the same thing as slowing down the spread of a disease. Free Market theory simply does not guarantee that we'll have the safest outcome in the shortest time.
Government has a role to play. The market can't do everything, as not every asset can be turned into private property and have a price attached to it. The meta function of enforcing respect for private property rights is also not something markets can provide.
In a pandemic, there are many things a state can do, like fund the development of open-source designs for masks and ventilators, and public domain treatments and vaccines.
It can also fund extensive reviews of the PPE and treatments on the market, to help consumers be better informed.
The government playing this role, while the market acts within the framework created by the public goods generated by the government, optimizes society's response to pandemics.
Price controls worsen society's response to pandemics.
>>Ah yes, you're right and it's true this can happen on the black market under price controls. In your thinking, why is that worse than unrestrained price gouging? What is the meaningful difference in outcome?
Without price controls, there will be larger stockpiles in place, so the market price will not spike as high during a pandemic. More importantly, shortages will not be as severe during pandemics.
Without price controls, business activity to alleviate the shortage is more greatly incentivized as well, leading to the shortage being filled more quickly.
>>Even under ideal conditions, the market takes time to respond to changes in demand. When spikes in supply are price-capped, let's assume not that it'll be price-capped forever and all time, but that either it will be price-capped during a time period that is too short for the market to respond to, or that changes in pricing will be rate limited rather than value limited.
That's a good point, but I think the conditions under which the benefits of free market prices don't outweigh the benefits of price controls to be very limited.
I can't imagine any scenario where price caps that extend for more than three days after a disaster (time enough for high prices to encourage air freight to bring essentials in) will do more good than harm.