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And that is free market at it's best. If something is in high demand with limited availability then I would expect the price to rise. Keeping the price artific
by sdoering 8y ago
And that is free market at it's best. If something is in high demand with limited availability then I would expect the price to rise.
Keeping the price artificially low would be like the policy of the old socialistic ideologies.
Isn't that what the free market evangelism teaches? As there is only one Venice, I would hope that the price reflects the amount of demand as well as the the amount of externalities that the tourism is producing.
This last aspect should be covered by taxes to ensure that the tourism not harms the city/environment, as not to fall into the trap of the tragedy of the commons.
- adwf 8y agoExcept taxes are almost explicitly not the free market. If hotels want to raise their prices they can, if not, then not. Taxes are the definition of market distortion. It would be a crying shame if all the world's greatest sights were restricted to the rich due to government interference. EDIT: It would also be a shame if all the world's greatest sights were destroyed by mass-tourism, so who knows? But pretending it's as simple as an Econ 101 problem would be naive.
- alistairSH 8y agoTaxes are a distortion, but also one way to deal with the tragedy of the commons (in this case, previously remote locales that cannot absorb the influx off tourists). Lottery or some other system to limit access could also work.