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> price controls really are bad, Citation needed and not from some ooga booga free marketer. Price control schemes exist in almost every country and in the US

by _pi 2y ago

> price controls really are bad, Citation needed and not from some ooga booga free marketer. Price control schemes exist in almost every country and in the US, every subsidy is a form of price control. Price controls are not just ceilings and floors. The Prime Interest rate is a price control for money. Ration cards are price controls. The reason that price controls are dangerous to an economy (esp. a capitalist one) is typically that if you're controlling for price (via floor and ceiling) you have to also control for distribution. Price controlled goods must be distributed as a nonprofit service with limits rather than a for profit enterprise. That's often the "fuck up" that's most cited but that's a "learn basic economics" issue. Literally that was Nixon's entire fuck up, and it was compounded by the death of Bretton Woods. Price controls worked just fine before/during/after WWI and WWII. Public transit is the most obvious form of price controls that work because the distribution and the commodity/service are both run as a nonprofit service. Also if you care about the whole 'OMG BLACK MARKETS' thing, see distribution, and understand that if you have a price that actually represents the cost of delivering a commodity to a consumer, a black market forming around that commodity is the same kind of market as a "free market". It is simply dudes trying to get the most amount of profit for arbitrage of a good they get at cost. Also "subsidies don't work", the subsidy often not a consumer subsidy it's a producer profit subsidy. See EV's which all have subsidies built into their price except the Leaf. You see the problem here? In order to actually do this correctly and have the desired effect on consumers, you need everyone to open their books. That's not going to happen in a capitalist system. So their alternative is "get lucky". Private profit guides economic policy more than the actual data or methodology. The more interesting thing of "regulation" here. Is if the government can effectively regulate a company's backlog. Apple's walled garden is intentionally constructed on their side such that there cannot be competition because the controls for such competition are unbuilt. The PWA issue in the EU shows that if you take them at face value which I would having worked with Apple products and done a bit of jail breaking back in the day. So effectively they need to create public features for supporting alternative wallets in a secure way. Outside of iMessage, wallets are the only real thing the gov has to stand on. Super apps are just a semantic exercise. Cloud-streaming is a non-issue Apple doesn't compete in a cloud streaming vertical. Apple Arcade is just a subscription to an app store. They don't stream the games. The Smart Watches thing is also bunk. Samsung does the same thing, with watches and headphones. If I switch to a Google Pixel my headphones lose features. Unless the government is in the mood to create and regulate open tech standards this a nothing burger. It's in practice arguing that Apple cannot have a private SDK which I would be fine with but they're not actually arguing that. The reason that this is not like US vs MS is because MS's settlement did not result in forcing MS to CHANGE the code, only allowing OEM's to bundle other browsers. US vs MS in practicality was just a big nothing burger. Not even the EU government is in a place to regulate and enforce Open APIs. Also speaking of ooga booga free marketers. Milton Friedman predicted that US vs MS is going to be a dark age of government regulation of tech and prevent innovation. Lmao.

anon373839 2y ago
To put it more precisely, price controls create market distortions and Pareto inefficiency. Though I think they are worth the cost in some instances, they aren’t a scalable solution to anything. Also, it’s almost impossible to know what the “correct” price of a good should be because the factors that determine that are part of a very complex network.
- _pi 2y ago
  In context you've unlocked the tautology that underpins capitalism. > Pareto inefficiency > almost impossible to know what the “correct” price Yes it's really really hard to price things, but the market itself is Pareto inefficient unless you labor under the axiom that the market price is the "correct" price, which it cannot actually be. > market distortions Why is this a bad thing? > they aren’t a scalable solution to anything Do you believe in UBI or that UBI is scalable? That's a price control. Again every public transportation system in the world is price controlled, market distorted, and Pareto inefficient. So they are a scalable solution to providing a public service of regional/urban travel. > Also, it’s almost impossible to know what the “correct” price of a good should be because the factors that determine that are part of a very complex network. Most companies that are not trying to grow and are trying to turn a profit literally have prices that not only take into account the cost of the good but marginal profit on a unit basis. This chain goes all the way back to digging out the raw materials from the earth. Your entire "complex" network of calculations is done there. Why can it not be done elsewhere?
  - anon373839 2y ago
    I think we might be talking about different things, because some of the issues you've mentioned are not examples of price controls or direct market intervention. UBI, for example, is a post-market transfer payment that is certainly a "cleaner" way to redistribute wealth than to futz with individual price signals. (I don't actually support UBI, but not for reasons relevant to this discussion.) > the market itself is Pareto inefficient unless you labor under the axiom that the market price is the "correct" price This mischaracterizes my original argument. I don't think anyone who is serious believes that real-world markets establish optimal prices. Perfection isn't relevant: the question is whether markets perform better than government planning, and fortunately we don't have to speculate on that question. Resoundingly, the historical record shows that central planning reduces the total amount of wealth available to be distributed. > Why [are market distortions] a bad thing? An example might be useful. Consider when California capped retail electricity prices in 2000. Even though this was far from a competitive market to begin with, the result was predictable: shortages. The price caps reduced utilities' incentive to expand production, and simultaneously increased consumers' incentive to use electricity. (There were other factors involved in this debacle, but the price caps were a key feature.) > This chain goes all the way back to digging out the raw materials from the earth. Your entire "complex" network of calculations is done there. Why can it not be done elsewhere? I think you have to broaden your field of view on this a bit to appreciate the problem. You're only considering the perspective of a single supplier in a single market, in isolation. In reality, there is a complex equilibrium that results not only from the forces acting inside a market, but also from the forces exerted by other markets. Suppose you're a pencil manufacturer. Of course you can calculate some output price for your pencils that reflects costs + some profit margin. However, we don't know if that output price will incentivize good pencil-purchasing behavior. Perhaps you're the only seller of pencils worldwide, and the price is too low. In this case, people who don't really value pencils buy them anyway, and your inventory is depleted. Now, pencils are sitting unused in random drawers, while there are art classes that have to be canceled because the students can't get the supplies they need. (You've mentioned a need to control distribution, but haven't suggested a way for these distributive decisions to be made.) Consider also that graphite is an input price. How much should that cost? It's useful for making pencils, but it's also used in nuclear reactors and lithium-ion batteries. If the Department of Homeland Prices is going to choose a good price for graphite, they're going to need to decide how many pencils the world needs, how many nuclear reactors, and how many lithium-ion batteries. Of course, those items feed into other items...

by _pi 2y ago

anon373839 2y ago

To put it more precisely, price controls create market distortions and Pareto inefficiency. Though I think they are worth the cost in some instances, they aren’t a scalable solution to anything. Also, it’s almost impossible to know what the “correct” price of a good should be because the factors that determine that are part of a very complex network.

_pi 2y ago
In context you've unlocked the tautology that underpins capitalism. > Pareto inefficiency > almost impossible to know what the “correct” price Yes it's really really hard to price things, but the market itself is Pareto inefficient unless you labor under the axiom that the market price is the "correct" price, which it cannot actually be. > market distortions Why is this a bad thing? > they aren’t a scalable solution to anything Do you believe in UBI or that UBI is scalable? That's a price control. Again every public transportation system in the world is price controlled, market distorted, and Pareto inefficient. So they are a scalable solution to providing a public service of regional/urban travel. > Also, it’s almost impossible to know what the “correct” price of a good should be because the factors that determine that are part of a very complex network. Most companies that are not trying to grow and are trying to turn a profit literally have prices that not only take into account the cost of the good but marginal profit on a unit basis. This chain goes all the way back to digging out the raw materials from the earth. Your entire "complex" network of calculations is done there. Why can it not be done elsewhere?
- anon373839 2y ago
  I think we might be talking about different things, because some of the issues you've mentioned are not examples of price controls or direct market intervention. UBI, for example, is a post-market transfer payment that is certainly a "cleaner" way to redistribute wealth than to futz with individual price signals. (I don't actually support UBI, but not for reasons relevant to this discussion.) > the market itself is Pareto inefficient unless you labor under the axiom that the market price is the "correct" price This mischaracterizes my original argument. I don't think anyone who is serious believes that real-world markets establish optimal prices. Perfection isn't relevant: the question is whether markets perform better than government planning, and fortunately we don't have to speculate on that question. Resoundingly, the historical record shows that central planning reduces the total amount of wealth available to be distributed. > Why [are market distortions] a bad thing? An example might be useful. Consider when California capped retail electricity prices in 2000. Even though this was far from a competitive market to begin with, the result was predictable: shortages. The price caps reduced utilities' incentive to expand production, and simultaneously increased consumers' incentive to use electricity. (There were other factors involved in this debacle, but the price caps were a key feature.) > This chain goes all the way back to digging out the raw materials from the earth. Your entire "complex" network of calculations is done there. Why can it not be done elsewhere? I think you have to broaden your field of view on this a bit to appreciate the problem. You're only considering the perspective of a single supplier in a single market, in isolation. In reality, there is a complex equilibrium that results not only from the forces acting inside a market, but also from the forces exerted by other markets. Suppose you're a pencil manufacturer. Of course you can calculate some output price for your pencils that reflects costs + some profit margin. However, we don't know if that output price will incentivize good pencil-purchasing behavior. Perhaps you're the only seller of pencils worldwide, and the price is too low. In this case, people who don't really value pencils buy them anyway, and your inventory is depleted. Now, pencils are sitting unused in random drawers, while there are art classes that have to be canceled because the students can't get the supplies they need. (You've mentioned a need to control distribution, but haven't suggested a way for these distributive decisions to be made.) Consider also that graphite is an input price. How much should that cost? It's useful for making pencils, but it's also used in nuclear reactors and lithium-ion batteries. If the Department of Homeland Prices is going to choose a good price for graphite, they're going to need to decide how many pencils the world needs, how many nuclear reactors, and how many lithium-ion batteries. Of course, those items feed into other items...