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Economists who defend disaster profiteers are wrong

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Re: Economists who defend disaster profiteers are wrong

#91

Post by h0l0cube »

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…

> And many modern economists endorse a minimum wage, as eugenicists did then, but with even less regard for the harm it causes.

What are the harms of a minimum wage? Do you have any empirical sources to back that up?

Re: Economists who defend disaster profiteers are wrong

#92

Post by dahart »

xapata wrote: post #82

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.

> Why does someone have a de-facto monopoly in some markets?

In this case, and in the case of any disaster, that question has an answer, and there’s no problem that a government or anyone can solve. People who happened to make masks and sanitizers, or happened have them in stock, by luck, suddenly became de-facto monopolies. And it will just as suddenly go away.

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

In this case, and in the case of any disaster, new competition cannot appear fast enough to meet the demand before the demand goes away. The demand is inherently unstable. Even if competition arrives, the demand will drop, so someone’s going out of business. This free market belief that things will settle at the right place depends on the assumption that there’s infinite time for the market to settle, it doesn’t really address the fact that without some regulation you can sometimes end up in situations where both producers and consumers lose, where there is only economic loss. If the demand changes too quickly, price gouging costs consumers, too many people got sick from lack of supplies due to price gouging, suppliers ramp up production only to have demand vanish, and they suffer loss of demand at the same time they’re stuck with warehouses of oversupply. Sometimes nobody wins if there’s nothing to hold back reactionary behavior.

Re: Economists who defend disaster profiteers are wrong

#93

Post by dwohnitmok »

droopyEyelids wrote: post #65
wpietri wrote: post #45

Earlier quoted context omitted.

> An important point the article didn’t address is that high prices direct resources to more important uses. Neither do high prices. Those direct them to people with more money to spend. Confusing "richer" with "more important" is always a bad idea, but especially so with goods like medical supplies. A billionaire who wants to stockpile a million masks just in case definitely not "more important" than a million poor…

In the absence of a law structuring the sale, money is the best proxy we have for importance. The law, in a system of democratic governance, is a big asterisk to that sentence! It's important too. But aside from that, price signaling is our most 'objective' way to determine importance.

> In the absence of a law structuring the sale, money is the best proxy we have for importance.

I strongly disagree under these circumstances. Prices are one benchmark of importance/value and are often useful as such. But Goodhart's Law comes here in full force.

In particular I would argue that when unusual things happen, the usual benchmarks and proxies we have deserve extra scrutiny, since often any discrepancy between a measure and what is being measured is magnified in abnormal times.

And right now times are quite abnormal. Now is exactly when traditional benchmarks of value should be re-evaluated to see if they are still useful under present circumstances.

Re: Economists who defend disaster profiteers are wrong

#94

Post by AnthonyMouse »

theschmed wrote: post #84
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....

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

The argument in this case appears to be exactly that, i.e. we shouldn't do that because those people would make too much money.

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

There was a lot more to dislike about eugenics than genocide. You play the same game from the other side and you get to claim that Stalin's purges are attributable to the minimum wage because minimum wage is a communist policy and therefore responsible for all the things the communists did.

Eugenics is a much more mundane stupidity than that, like purposely trying to breed a lack of genetic diversity independent of "race" -- and we still do this with crops and livestock to our peril -- but back then they did it with people.

This has obvious parallels to minimum wage, where people are messing with something they don't fully understand based on simplistic assumptions. And then you do things like make it harder for young people to get internships because they can't pay a living wage even though that was never their purpose to begin with, or subject desperate people to really terrible jobs with longer commutes or less flexibility or otherwise higher real costs that actually really messes up their lives because you decreed that they couldn't accept a better job that pays less. Which have serious and long-term effects on large numbers of people.

Re: Economists who defend disaster profiteers are wrong

#95

Post by giardini »

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…

nonidentified says>"As a profession, we have a miserable track record on morality."Hah! As a profession, you've had a miserable track record on _economics_! The profession should be academically "tarred, feathered and ridden out of town", departments dismantled and the models handed over to Operations Research departments along with a strong warning.

Re: Economists who defend disaster profiteers are wrong

#96

Post by AndrewUnmuted »

theschmed wrote: post #84
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....

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.

Re: Economists who defend disaster profiteers are wrong

#97

Post by xphilter »

AnthonyMouse wrote: post #94
theschmed wrote: post #84

Earlier quoted context omitted.

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....

> Is there another kind of argument from morality EXCEPT those that go, "We shouldn't do that because it could harm people?" The argument in this case appears to be exactly that, i.e. we shouldn't do that because those people would make too much money. > Hard to take someone seriously who blithely compares genocide to a minimum wage.... There was a lot more to dislike about eugenics than genocide. You play the same g…

You are comparing adjudicating the worth of a non changeable attribute of a human to the minimum cost of labor. If you can’t see the difference between the two then I don’t know what to do. There slippery slope arguments then there are just silly arguments.

Re: Economists who defend disaster profiteers are wrong

#98

Post by biggestdecision »

weare138 wrote: post #28
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. 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…

Hospitals are experiencing shortages, because the masks don't exist - there is not enough mask production in the world.

To limit supply to drive up the price, this will only work if the mask manufactures are a cartel.

Re: Economists who defend disaster profiteers are wrong

#99

Post by AlexandrB »

h0l0cube wrote: post #91
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…

> And many modern economists endorse a minimum wage, as eugenicists did then, but with even less regard for the harm it causes. What are the harms of a minimum wage? Do you have any empirical sources to back that up?

I love how the parent stakes out several moral positions but tries to present them as objective truth or just “the way things are” with no evidence presented. Clever.

In my experience, once you get past the basics, economics is largely about dressing up ideology in the trappings of science. More generously, economics seems to be most similar to philosophy with competing schools of thought that differ primarily in what assumptions and axioms they choose when modeling human behavior.

Re: Economists who defend disaster profiteers are wrong

#100

Post by AnthonyMouse »

xphilter wrote: post #97
AnthonyMouse wrote: post #94

Earlier quoted context omitted.

> Is there another kind of argument from morality EXCEPT those that go, "We shouldn't do that because it could harm people?" The argument in this case appears to be exactly that, i.e. we shouldn't do that because those people would make too much money. > Hard to take someone seriously who blithely compares genocide to a minimum wage.... There was a lot more to dislike about eugenics than genocide. You play the same g…

You are comparing adjudicating the worth of a non changeable attribute of a human to the minimum cost of labor. If you can’t see the difference between the two then I don’t know what to do. There slippery slope arguments then there are just silly arguments.

There are many people with disabilities that prevent them from doing ordinary work but who could do certain jobs with lower productivity. A minimum wage is essentially telling these people that they are worthless and should sit in a room doing nothing even though they want to work and feel useful, and in many cases this makes their lives substantially worse because they both feel useless and have less income when they can't work.

That actually sounds kind of a lot like what they did to some of the victims of eugenics.

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