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> it's a government that has created this problem in the first place, keeping the price at below market price Okay, there's a data point I missed. The price s

by gpvos 10y ago

> it's a government that has created this problem in the first place, keeping the price at below market price Okay, there's a data point I missed. The price should be appropriate, and in this case too high is better than too low. I agree in general that when the market can do something, it should. However, I don't think the market is capable of seeing into the far future (see petrol prices, which are way too low in the US and only more-or-less appropriate in Europe due to taxes).

jerf 10y ago
The market is not capable of seeing into the far future, because nothing is capable of seeing into the far future. This is not mere wordplay. It's a vital component to understanding how the world works. After all, remember what article this is that we're commenting on; a discovery of a potentially new significant source of helium. After you've fiddled with the market because you know it's making helium too cheap, how are you going to feel after something like this comes up five years later, having made medical treatments and other such things more expensive only for it to turn out that your sure and certain knowledge of the situation was wrong? The "time value of money" is actually directly related to the fact that uncertainty compounds exponentially. Future money is worth less because you're that much less certain that you'll even have the money, or what you can spend it on. But the point about uncertainty goes beyond just money. There's a reason why "five year plan" is a joke for people educated in history.
- gpvos 10y ago
  True, true. You could have concluded from my previous comment that I'm not a fan of five-year plans. The market still functions in Europe. Nevertheless, I hold to the precautionary principle in environmental issues. If such a helium source were never found, we'd be in some trouble. (We've lived for millennia without using helium, so we'll manage, but there are probably several things we can't do at all without it.) Now we know that there are likely more sources, we can relax and maybe leave it to the market. This is similar to, although not as bad as, how we haven't been able to prevent global warming; there may be a point at which no amount of money or work is going to fix that. Governments may not be much better at preventing things like that, but at least they have a chance.
  - nickik 10y ago
    I think the different between your example is that the stratosphere has no system of property rights, so their simly is no market. Helium is different, their is no clear market failure of any kind. As government provided helium will start to run out, future prices will rise. Potential gain from increasing production will raise as well. When prices rise many people will move to alternatives softening the rise in price. Once the prices are higher, their will be a huge insentive to figure out a way to produce it economically. The equillibrium price will probebly be higher then now, but currently we are living in an artefical low, so setting the goal of continuing this current low price is simply unrealistic even if government manages it, to keep the price this low they would have to subsidise it eventually and I don't think that is a worthwhile thibg for governemnt.

by gpvos 10y ago

jerf 10y ago

The market is not capable of seeing into the far future, because nothing is capable of seeing into the far future. This is not mere wordplay. It's a vital component to understanding how the world works. After all, remember what article this is that we're commenting on; a discovery of a potentially new significant source of helium. After you've fiddled with the market because you know it's making helium too cheap, how are you going to feel after something like this comes up five years later, having made medical treatments and other such things more expensive only for it to turn out that your sure and certain knowledge of the situation was wrong? The "time value of money" is actually directly related to the fact that uncertainty compounds exponentially. Future money is worth less because you're that much less certain that you'll even have the money, or what you can spend it on. But the point about uncertainty goes beyond just money. There's a reason why "five year plan" is a joke for people educated in history.

gpvos 10y ago
True, true. You could have concluded from my previous comment that I'm not a fan of five-year plans. The market still functions in Europe. Nevertheless, I hold to the precautionary principle in environmental issues. If such a helium source were never found, we'd be in some trouble. (We've lived for millennia without using helium, so we'll manage, but there are probably several things we can't do at all without it.) Now we know that there are likely more sources, we can relax and maybe leave it to the market. This is similar to, although not as bad as, how we haven't been able to prevent global warming; there may be a point at which no amount of money or work is going to fix that. Governments may not be much better at preventing things like that, but at least they have a chance.
- nickik 10y ago
  I think the different between your example is that the stratosphere has no system of property rights, so their simly is no market. Helium is different, their is no clear market failure of any kind. As government provided helium will start to run out, future prices will rise. Potential gain from increasing production will raise as well. When prices rise many people will move to alternatives softening the rise in price. Once the prices are higher, their will be a huge insentive to figure out a way to produce it economically. The equillibrium price will probebly be higher then now, but currently we are living in an artefical low, so setting the goal of continuing this current low price is simply unrealistic even if government manages it, to keep the price this low they would have to subsidise it eventually and I don't think that is a worthwhile thibg for governemnt.