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Economists who defend disaster profiteers are wrong

economist.com

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Re: Economists who defend disaster profiteers are wrong

#81

Post by AnthonyMouse »

arcticbull wrote: post #32
weare138 wrote: post #28

Earlier quoted context omitted.

> If prices are very high then hospitals may be the only ones who can afford them, versus people on the street. Outlawing price gauging alone just ensures masks go to people who don’t need them as much as doctors. The problem is that doesn't seem to reflect the reality of the situation. Why are hospitals still experiencing shortages? What stops manufacturers and sellers from limiting supply to drive up prices? This i…

Not to mention, charging hospitals at the front-line of saving us all exorbitant rates (just to stop masks from going to randos on the street who don't need them) is grotesque. You're gouging our first responders just so people who don't need masks don't get them? Are you kidding me? There must be a more effective answer in a pandemic. This has to be one of the most late-stage capitalist things I've heard all pandemi…

The point isn't for "first responders" to be paying for masks out of their own pockets, it's for the healthcare system (i.e. ultimately insurance companies) to pay higher prices so that more masks are made available to first responders, either by stimulating new production or reallocating existing masks.

If you just start confiscating them then anyone who did something we very much would like them to have done right now -- stockpiled a lot of such equipment to profit in just such an emergency, thereby causing such a stockpile to actually exist -- would see what you've done and choose not to do it anymore. And then next time the shortage is worse.

Re: Economists who defend disaster profiteers are wrong

#82

Post by xapata »

Monopoly pricing causes a lower supply quantity than competitive pricing. The issue is the monopoly, not the price. The government should address the underlying issue: Why does someone have a de-facto monopoly in some markets?

When competition exists, the prices will fall to appropriate levels to correctly distribute the emergency goods.

Re: Economists who defend disaster profiteers are wrong

#83

Post by mywittyname »

quotemstr wrote: post #63
mywittyname wrote: post #57

Earlier quoted context omitted.

Price gouging is wrong because not helpful at all. 1) it doesn't increase the supply of goods. Everyone is very aware that there's a shortage and they are working hard to produce more. Jacking up the price does not achieve this goal. 2) it encourages hording of critical supplies. People don't want to sell now in hopes of getting a better price tomorrow. They continue to do so until the next batch of supplies come ont…

Re #1: yes it does. For example, during Katrina, high prices encouraged people to drive long distances to bring supplies from other states. Re #2: low prices, not high prices, encourage hoarding. Why not buy 20 multi-packs of toilet paper if it's cheap? If toilet paper is expensive, you buy what you need. The alternative to price gouging isn't everyone getting what he needs: that's a fantasy. The actual alternative i…

1) people were also shipping water and other supplies to Katrina for free. I literally spent hours during the aftermath of Katrina filling aid packages for people affected by the storm. These aid packages were not sold, they were given away to people who had lost everything.

These supplies are already being produced as fast as possible. Even people with 3d printers are making these masks to give away

#2) bubbles form with a group of people purchase goods at already inflated prices, with the explicit attempt to drive up prices further and sell them for a profit. "If people are willing to pay $50 for a roll of toilet paper, maybe if I buy up all the toilet paper, I can sell it for $500!" -People causing bubbles.

3) If the state has a responsibility to maintain order, then they have a responsibility to combat price gouging, because failing to do so is a failure to maintain order. It's not an emotion issue, it's a rational one.

I feel like you're the one whose intuition is off. What I'm talking about are real, proven issues with price gouging and these are literally the reason that it is outlawed in nearly all of the USA. It's a slam-dunk case for prosecutors too. There's a reason why people caught price gouging are in the news the next week for "donating" their stash.

Re: Economists who defend disaster profiteers are wrong

#84

Post by theschmed »

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…

Is there another kind of argument from morality EXCEPT those that go, "We shouldn't do that because it could harm people?"

Hard to take someone seriously who blithely compares genocide to a minimum wage....

Re: Economists who defend disaster profiteers are wrong

#85

Post by roywiggins »

alexmingoia wrote: post #44
jimmaswell wrote: post #18

Earlier quoted context omitted.

Exactly this. Why is Scrooge McDuck buying the entire supply of something somehow better than evenly distributing it? I can't believe people actually think making toilet paper $20 a roll is the correct outcome instead of rationing with price controls. Maybe it's the Ferengi mentality of people seeing themselves as the exploiters.

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."

If many people can't afford TP, they will start flushing other things, which will block everyone else's toilets.

Re: Economists who defend disaster profiteers are wrong

#86

Post by [deleted] »

perl4ever wrote: post #16
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…

I was able to get kleenex and paper towels saturday because the grocery store is now limiting people to one purchase per day. I am sure there are people who need more than that, and any system of rationing should allow for exceptions. But when people insist that a "free" market is inherently correct, it's no different from insisting that your OS scheduler is perfect even though some processes never get to run https:/…

[deleted]

Re: Economists who defend disaster profiteers are wrong

#87

Post by steve76 »

When faced with oblivion, the Beaker people went into a frenzied overdrive, doing only what they knew what to do, stack stones.

Invading barbarians took a look or two, then just walked around it and killed them all. If anything, stacking stones impeded their escape and walled them in.

On 60 Minutes, they talked to an unemployed worker who was going to be broke in a month. On PBS they talked to the first responder without health insurance.

A sad fact of the world is a job and health insurance is just a really complex hug. You are one wrong move from being broke forever job or jobless, or being dead insured or uncovered.

What are the real needs? Not getting sick. Stay at home. Reject the world for quiet study. It's really not that difficult once you learn the language.

What I want to see? Cosmos Live. Open up the research and let people just watch. Management class needs more knowledge workers.

Re: Economists who defend disaster profiteers are wrong

#88

Post by [deleted] »

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…

[deleted]

Re: Economists who defend disaster profiteers are wrong

#89

Post by jrumbut »

lettergram wrote: post #66
perl4ever wrote: post #16

Earlier quoted context omitted.

I was able to get kleenex and paper towels saturday because the grocery store is now limiting people to one purchase per day. I am sure there are people who need more than that, and any system of rationing should allow for exceptions. But when people insist that a "free" market is inherently correct, it's no different from insisting that your OS scheduler is perfect even though some processes never get to run https:/…

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.

We will all suffer if masks and basic hygiene products aren't allocated well.

There is not enough time to solve the coordination problem (or, more accurately, we solved it in advance).

The government elected by most market participants steps in (or threatens to step in) to help maintain order. This seems like a less crazy idea than seeing how many nurses will pay $500 for a mask.

Re: Economists who defend disaster profiteers are wrong

#90

Post by ruytlm »

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…

> If prices are very high then hospitals may be the only ones who can afford them, versus people on the street.

Every extra dollar spent on those high prices is a dollar that could have been spent providing better care in some other way.

Increasing prices does not increase hospitals' budgets for PPE; it only means something else must be cut.

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