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Inexpensive commodities should be a universally positive goal. Scarcity is a plague we need to cure. Strains on supplies of commodities, driving prices upward

Inexpensive commodities should be a universally positive goal. Scarcity is a plague we need to cure. Strains on supplies of commodities, driving prices upward only indicates supply scarcity, not necessarily related to widespread creation of material goods.

pjlegato 11y ago
Getting rid of scarcity is great as a long term goal, but it's not happening any time soon. The technology does not exist yet to do so, which is why these things are still traded for money. This goal is unfortunately not relevant to commodity price movements on human time scales, and falling prices shouldn't be interpreted as evidence of scarcity no longer existing. Commodity prices don't fall because someone invented a great new way to get corn or oil without labor or fertilizer or land; they fall because of short-term supply and demand imbalances. Upward prices does not only indicate supply scarcity. It might indicate supply scarcity, or it might indicate increased demand. There are two sides to the market, and either can move the price. Prices are not "driven" upwards by some teleological entity that just wants higher prices; the action of people buying and selling finds a consensus equilibrium based on supply and demand. If one commodity price is going up, it might be the case that there's a supply shortage. If all are going up, it indicates broad based demand due to a healthy economy that requires more inputs. Broad supply scarcity rarely if ever extends beyond a few specific commodities. Oil might be scarce, but all commodities being scarce almost never happens. Commodities are widely produced in many diverse locations all around the world by groups with widely different goals. If the average price of all commodities is rising broadly, it's demand-driven, not supply constraint. Barring events like a world war, there will never be a massive simultaneous supply shortage in oil, wheat, corn, soybeans, cattle, hogs, gold, silver, and frozen orange juice. A broad price rise is thus generally a good thing since it means lots of people have jobs producing things and are making money to buy things that require these inputs.

pjlegato 11y ago

Getting rid of scarcity is great as a long term goal, but it's not happening any time soon. The technology does not exist yet to do so, which is why these things are still traded for money. This goal is unfortunately not relevant to commodity price movements on human time scales, and falling prices shouldn't be interpreted as evidence of scarcity no longer existing. Commodity prices don't fall because someone invented a great new way to get corn or oil without labor or fertilizer or land; they fall because of short-term supply and demand imbalances. Upward prices does not only indicate supply scarcity. It might indicate supply scarcity, or it might indicate increased demand. There are two sides to the market, and either can move the price. Prices are not "driven" upwards by some teleological entity that just wants higher prices; the action of people buying and selling finds a consensus equilibrium based on supply and demand. If one commodity price is going up, it might be the case that there's a supply shortage. If all are going up, it indicates broad based demand due to a healthy economy that requires more inputs. Broad supply scarcity rarely if ever extends beyond a few specific commodities. Oil might be scarce, but all commodities being scarce almost never happens. Commodities are widely produced in many diverse locations all around the world by groups with widely different goals. If the average price of all commodities is rising broadly, it's demand-driven, not supply constraint. Barring events like a world war, there will never be a massive simultaneous supply shortage in oil, wheat, corn, soybeans, cattle, hogs, gold, silver, and frozen orange juice. A broad price rise is thus generally a good thing since it means lots of people have jobs producing things and are making money to buy things that require these inputs.