5 ms·
The reason there are line-ups in the short-term is rarely because of the pricing mechanism, but because the degree of control required for effective rationing r
by curiousgeorge 18y ago
The reason there are line-ups in the short-term is rarely because of the pricing mechanism, but because the degree of control required for effective rationing requires fewer points of distribution. If you could vote at the convenience store, you wouldn't need to line up to vote either....
The supply and demand argument isn't tenable in areas with both inelastic supply and demand. The possible solutions all involve tradeoffs, and there are good and bad ways to implement them. The good news is that rationing doesn't necessarily require price controls, and there are effective and ineffective ways of sending price signals and otherwise encouraging/discouraging production.
My personal preference is subsidization for the poor - an approach which prices scarcity by trading cash for convenience. Telling the starving that a big of hunger is good for them in the long-run is silly. A bit like arguing the Great Depression was nothing more than a purge of rottenness from the system. When all the banks have collapsed we'll all be better off!