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You're using an inadequate notion of what a "good argument" is in this context. You have not made an argument for why a price floor is necessary or desirable. I
by Pyxl101 11y ago
You're using an inadequate notion of what a "good argument" is in this context. You have not made an argument for why a price floor is necessary or desirable. I could just as easily say, "The good argument for having a maximum 'price of bread' is that without it, bread prices will be pressured up, because every bakery on the planet wants prices as high as possible, and they generally have the means to achieve it." You can say that all you want, but you haven't provided a justification that it's actually true, or that the situation warrants legislation of one interest over the other. You haven't given a justification or any consideration to the tradeoffs involved.
Do you know what happens when real countries try to impose a limit on the price of bread? Starvation. The Soviet Union tried to establish a limit on the price of bread. Since the actual cost to grow wheat, bake bread, and transport it to cities was high, the supply chain couldn't make a profit (or even break even) selling at the government-specified price. So they stopped, and mass food shortages resulted. That's what happens when you tamper with the economy. Gorbachev finally fixed the problem by transitioning away from a planned economy to a free market: http://www.nytimes.com/1990/05/23/world/evolution-in-europe-gorbachev-plans-to-double-prices-of-food-next-year.html http://www.nytimes.com/1990/05/23/world/evolution-in-europe-...
By allowing the price of bread to rise significantly, bakers and bread suppliers could finally turn a profit (i.e., not take a loss) selling bread, and so they began to do so. This is how the market forces of supply and demand lead to efficiency and achieve the right outcome. For example, if a crisis happens, then food becomes scarce; when food is scarce, people are willing to pay a high price for it; and because people are willing to pay a high price, this creates an incentive for people to go to extraordinary lengths to provide food there and reap the benefit of that high price.
If you establish a price floor, then you're tampering with the economy in a complex way. You had better be prepared to reason about the economic deadweight loss (e.g., unemployment, shortages) that will result, and you should be prepared to provide a thorough justification for why the benefit of that legislation justifies the cost you're imposing on the economy through deadweight loss.
Equating jobs to slavery is an outrageous argument, and disingenuous. Slavery is the act of taking away someone's freedom and forcing them to work for you without choice. Jobs are a free market - anyone is free to work a job that's offered to them, or not. They can quit and look for a better alternative. That is the market pressure that forces wages up: if employees have a better option, they'll take it.
- Retra 11y ago>You have not made an argument for why a price floor is necessary or desirable. I'm pretty sure that's all I did. Your inability to see that is on you. >"The good argument for having a maximum 'price of bread' is that without it, bread prices will be pressured up, because every bakery on the planet wants prices as high as possible, and they generally have the means to achieve it." You can say that all you want, but you haven't provided a justification that it's actually true, or that the situation warrants legislation of one interest over the other. No. You have provided that justification. You just said what the justification for maximum price of bread is. But those businesses don't have the means to achieve maximum bread price. And if bread was being sold for billions of dollars per slice, the price almost certainly would be regulated down. For exactly the arguments you've made: without it bread becomes absurdly expensive. >The market forces of supply and demand create pressures both up and down on wages, and an equilibrium between them is what allows markets to be efficient. Efficient at what? Efficient at reaching equilibrium. Not efficient at meeting the goals of society, which involve complex moral and political conditions not captured or measured by any market. >Equating jobs to slavery is an outrageous argument, and disingenuous. It is not. Especially with wages being systematically driven down to below what is necessary for survival. The minimum wage was created because there were real problems caused by not having it. Negative wages have existed in a "free" market.
- deleted 11y ago[deleted]
- makomk 11y ago> I could just as easily say, "The good argument for having a maximum 'price of bread' is that without it, bread prices will be pressured up, because every bakery on the planet wants prices as high as possible, and they generally have the means to achieve it." You could certainly just as easily say that, but there's an obvious reason why it isn't true: so long as there are multiple suppliers and it's possible to produce bread in quantities sufficient to more than supply the population, each supplier can benefit from undercutting the prices offered by the others and capturing a larger share of the market, and this drives down prices to relatively near the cost of production. (As for the case when it's not possible to produce enough bread, take a look at the history of rationing during wartime and why it existed.) This argument simply doesn't apply to the comment you're replying to.