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What you're observing here is the "Tragedy of the Commons". Nobody owned the passenger pigeons, so people hunted them to extinction. This is not free market. Fo

What you're observing here is the "Tragedy of the Commons". Nobody owned the passenger pigeons, so people hunted them to extinction. This is not free market. For example, despite all the pigs, cows, and chickens being eaten, there is no shortage of them and no threat of them going extinct. That's because people own those resources, they are not in the Commons. Oscillations are not shortages. For example, when there's a natural disaster, people load up their pickups with gas and water and rush in to sell it at high prices. I.e. the shortage promptly disappears. People get mad at the high prices and pass laws to prevent that (i.e. price fixing), with the predictable result of shortages while they wait for FEMA to get around to delivering supplies.

eesmith 8y ago
So there are no shortages of chestnuts from the American Chestnut? Note that a large number of those trees were privately owned. How do you explain that as a "Tragedy of the Commons" scenario? Your example of "shortage promptly disappears" does not explain the situation in Puerto Rico.
- imtringued 8y ago
  Honestly your lack of basic economic and real world knowledge is irritating. The real world is not a perfect market. The real world is bounded by time. Therefore it is possible to have temporary shortages that resolve themselves over time. The entire point of free market economics is that those real world shortages are temporary. If chestnut trees could grow instantly the shortage would be gone instantly. There is an equilibrium where enough chestnuts are produced to match the consumers that can afford them. In a non free market economy like communism with a central planner this is not the goal. The planner will just set arbitrary prices and production quantities that do might or might not match the actual number of consumers. What happens is that those who buy the product first, get it first and often for a low price. The producer doesn't get a share of the profits and therefore the incentive to invest the surplus into more chestnut trees doesn't exist. The shortage is permanent (assuming no black markets).
- skookumchuck 8y ago
  > Chestnut There's plenty of wood for all uses. If you drive the back country, you'll see quite a few tree farms. > Puerto Rico The shortages there are the ones government utilities are supposed to provide. A lot of people, however, made money providing various solar power systems. Anyone who can pay for it can get power.
  - eesmith 8y ago
    I said "chestnuts" not "wood". It used to be part of the general American experience to eat chestnuts in fall/early winter. Hence the line "Chestnuts roasting over an open fire" which I quoted earlier. The chestnut shortage caused that tradition to all but disappear. The shortage wasn't caused by government setting the price. It wasn't caused by "Tragedy of the Commons". You don't even think there is a shortage because we've adjusted. It appears to be that if people can survive without it, perhaps by using an alternative, then there cannot be a shortage of something. Which is not what "shortage" means, at least for those who don't subscribe to the Texas sharpshooter fallacy. (If that is what shortage means, there can never be a shortage of toilet paper because there are other ways to clean one's butt - or you can get used to having a dirty butt.) Let's go back to the passenger pigeon. If we apply your logic then of course there's no shortage of passenger pigeon meat because really people are getting their food from other sources. Yes? I'll note that you even acknowledge that the absence of passenger pigeon meat was not - contrary to your first assertion - based on government price fixing ("The only time there's a shortage in a free market is when the government fixes the price.") Instead, you say the problem is that it wasn't part of a free market at all. So, what's the solution? Is is possible, within a free market system, to have saved the passenger pigeons? How does one "own" a migratory species which requires vast numbers in order to breed? And how does that ownership seem any different than price fixing by a monopoly owner, a.k.a., government prohibitions? And how does it factor in ecosystem changes caused by the presence/absence of that species?

eesmith 8y ago

So there are no shortages of chestnuts from the American Chestnut? Note that a large number of those trees were privately owned. How do you explain that as a "Tragedy of the Commons" scenario? Your example of "shortage promptly disappears" does not explain the situation in Puerto Rico.

imtringued 8y ago
Honestly your lack of basic economic and real world knowledge is irritating. The real world is not a perfect market. The real world is bounded by time. Therefore it is possible to have temporary shortages that resolve themselves over time. The entire point of free market economics is that those real world shortages are temporary. If chestnut trees could grow instantly the shortage would be gone instantly. There is an equilibrium where enough chestnuts are produced to match the consumers that can afford them. In a non free market economy like communism with a central planner this is not the goal. The planner will just set arbitrary prices and production quantities that do might or might not match the actual number of consumers. What happens is that those who buy the product first, get it first and often for a low price. The producer doesn't get a share of the profits and therefore the incentive to invest the surplus into more chestnut trees doesn't exist. The shortage is permanent (assuming no black markets).
skookumchuck 8y ago
> Chestnut There's plenty of wood for all uses. If you drive the back country, you'll see quite a few tree farms. > Puerto Rico The shortages there are the ones government utilities are supposed to provide. A lot of people, however, made money providing various solar power systems. Anyone who can pay for it can get power.
- eesmith 8y ago
  I said "chestnuts" not "wood". It used to be part of the general American experience to eat chestnuts in fall/early winter. Hence the line "Chestnuts roasting over an open fire" which I quoted earlier. The chestnut shortage caused that tradition to all but disappear. The shortage wasn't caused by government setting the price. It wasn't caused by "Tragedy of the Commons". You don't even think there is a shortage because we've adjusted. It appears to be that if people can survive without it, perhaps by using an alternative, then there cannot be a shortage of something. Which is not what "shortage" means, at least for those who don't subscribe to the Texas sharpshooter fallacy. (If that is what shortage means, there can never be a shortage of toilet paper because there are other ways to clean one's butt - or you can get used to having a dirty butt.) Let's go back to the passenger pigeon. If we apply your logic then of course there's no shortage of passenger pigeon meat because really people are getting their food from other sources. Yes? I'll note that you even acknowledge that the absence of passenger pigeon meat was not - contrary to your first assertion - based on government price fixing ("The only time there's a shortage in a free market is when the government fixes the price.") Instead, you say the problem is that it wasn't part of a free market at all. So, what's the solution? Is is possible, within a free market system, to have saved the passenger pigeons? How does one "own" a migratory species which requires vast numbers in order to breed? And how does that ownership seem any different than price fixing by a monopoly owner, a.k.a., government prohibitions? And how does it factor in ecosystem changes caused by the presence/absence of that species?