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This is a system that doesn't tend toward Nash equilibrium. If everyone is permitted to maximize their production then it floods the market, prices drop and eve

This is a system that doesn't tend toward Nash equilibrium. If everyone is permitted to maximize their production then it floods the market, prices drop and everyone loses. You could argue that you should let the strong survive. Wipe out the higher cost producers and leave yourself with a factor syrup producing industry. Yes you can (arbitrarily) value market efficiency over this, but the vast majority of products chose otherwise. They put together a system that benefits their interests. We do this all the time when we create laws. Now you have a few free-riders who benefit from the higher prices created by restricted supply, but who don't want to pay the cost. If the market was left to it's own devices, they would probably be out of husiness altogether or they would be running a factory sapping operation. And let's be clear, unlike water, energy, syrup is a luxury good not an essential commodity. The additional cost of inefficient production will be a rounding error for most consumers.

aianus 11y ago
> The additional cost of inefficient production will be a rounding error for most consumers. You can say this about almost any single consumer good. If this crap is allowed to proliferate, it would represent a material increase in the cost of living. > Yes you can (arbitrarily) value market efficiency over this What's arbitrary about preferring low-cost syrup? Monopolies are illegal for good reason, they unfairly enrich the monopolist at the cost of the consumer.
- rdlecler1 11y ago
  You're making a very strong value judgement that cheap goods and low cost production trump tradition and the ability for people to make a living. I simply don't accept your premise as a blanket statement.
pzone 11y ago
This is such narrow minded logic. I know you're referencing the logic of concentrated benefits and diffuse costs. Saying for any individual consumer, paying an extra 5% for their maple syrup on average is a drop in the bucket, so if sales are $1 billion USD, we're basically letting the farmers extract $50 million from consumers, and that's not too much money, so who cares? Well, I think $50 million is a lot of money, but that is seriously neglecting the other, bigger cost: the blocking of incentives to maximize production quantity and develop innovations. If the cartel were dismantled, it's not just that prices would fall for existing consumers, but total supply curve would increase as well, since farmers would each have the incentive to produce as much as possible. Maybe it would turn from a $1 billion market to a $1.25 billion market. Whatever the particular number, it's bound to be a huge amount of value destroyed. But the most violent sort destruction is that production quotas kill the incentive to innovate. Look at publications like this - there is very little incentive to experiment with new techniques like this in Quebec, because even if you could double your production, you wouldn't be allowed to sell anything past your quota. http://modernfarmer.com/2014/01/maple-syrup-revolution/ http://modernfarmer.com/2014/01/maple-syrup-revolution/ Destroying the incentive to innovate is murdering the future.

aianus 11y ago

> The additional cost of inefficient production will be a rounding error for most consumers. You can say this about almost any single consumer good. If this crap is allowed to proliferate, it would represent a material increase in the cost of living. > Yes you can (arbitrarily) value market efficiency over this What's arbitrary about preferring low-cost syrup? Monopolies are illegal for good reason, they unfairly enrich the monopolist at the cost of the consumer.

rdlecler1 11y ago
You're making a very strong value judgement that cheap goods and low cost production trump tradition and the ability for people to make a living. I simply don't accept your premise as a blanket statement.

pzone 11y ago

This is such narrow minded logic. I know you're referencing the logic of concentrated benefits and diffuse costs. Saying for any individual consumer, paying an extra 5% for their maple syrup on average is a drop in the bucket, so if sales are $1 billion USD, we're basically letting the farmers extract $50 million from consumers, and that's not too much money, so who cares? Well, I think $50 million is a lot of money, but that is seriously neglecting the other, bigger cost: the blocking of incentives to maximize production quantity and develop innovations. If the cartel were dismantled, it's not just that prices would fall for existing consumers, but total supply curve would increase as well, since farmers would each have the incentive to produce as much as possible. Maybe it would turn from a $1 billion market to a $1.25 billion market. Whatever the particular number, it's bound to be a huge amount of value destroyed. But the most violent sort destruction is that production quotas kill the incentive to innovate. Look at publications like this - there is very little incentive to experiment with new techniques like this in Quebec, because even if you could double your production, you wouldn't be allowed to sell anything past your quota. http://modernfarmer.com/2014/01/maple-syrup-revolution/ http://modernfarmer.com/2014/01/maple-syrup-revolution/ Destroying the incentive to innovate is murdering the future.