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What is wrong with free cars? What is wrong with free houses? What's wrong with free food? Demand curves are downward sloping, and supply curves are upward slo
by nanis 11y ago
What is wrong with free cars? What is wrong with free houses? What's wrong with free food?
Demand curves are downward sloping, and supply curves are upward sloping.
> but rationing does not affect the core of the issue. The allocation of portions of the supply already produced and available to the various individuals eager to obtain a quantity of the goods concerned is only a secondary function of the market. Its primary function is the direction of production. It directs the employment of the factors of production into those channels in which they satisfy the most urgent needs of the consumers. If the government's price ceiling refers only to one consumers' good or to a limited amount of consumers' goods while the prices of the complementary factors of production are left free, production of the consumers' goods concerned will drop. The marginal producers will discontinue producing them lest they suffer losses. The not absolutely specific factors of production will be employed to a greater extent for the production of other goods not subject to price ceilings. A greater part of the absolutely specific factors of production will remain unused than would have remained in the absence of price ceilings. There emerges a tendency to shift production activities from the production of the goods affected by the maximum prices into the production of other goods. This outcome is, however, manifestly contrary to the intentions of the government. In resorting to price ceilings the authority wanted to make the commodities concerned more easily accessible to the consumers. It considered precisely those commodities so vital that it singled them [p. 764] out for a special measure in order to make it possible even for poor people to be amply supplied with them. But the result of the government's interference is that production of these commodities drops or stops altogether. It is a complete failure.[1]
[1]: https://mises.org/library/human-action-0/html/pp/882 https://mises.org/library/human-action-0/html/pp/882
- dalke 11y agoHow about "What's right with free cars?" Very little. We know how to built communities which don't require cars. How about "What is right with free houses?" Oddly enough, free shelters for the homeless seem to help reduce homeless camps, hobo jungles, and Hoovervilles, and keep people from dying in nasty weather. Turns out people don't like to see signs of homeless on the streets, and are willing to pay money to reduce that sight. So it isn't "free houses" but "paid for reduction of an eyesore, and increase in good feelings." Perhaps some also consider those taxes a sort of insurance should bad times occur to them. How about "What's right with free food?" Again, it turns out most people don't like to see others dying of starvation when they walk down the street. Many are willing to pay something to avoid having to face that sight or feel pangs of empathy. Constructed that way, it's no longer "free X" but "paying for Y", where X is a way to achieve Y.
- sharemywin 11y agoI think both prospectives are valid. Personally, to normalize against the vast differences in income, I think some products and services(to a point) should be priced according to income. Medical premiums and deductibles for instance, child care, education loan payments, groceries, rent, and public transportation. If you really want to stir things up all prices are priced according to what would be charged to the top income earner in the US from last year and your price is your income divided by that number with caps(ie. premiums and deductibles no more than 12% of your income).