4 ms·

It creates liquidity in markets where it might not otherwise exist. Better to sell your stockpile than pointlessly build it.

gamblor956 7y ago
No, profiteering disrupts liquidity in markets where it would otherwise have existed, if not for the profiteers hoarding activities.
- rogerkirkness 7y ago
  No, it doesn't. The difference is whether or not someone who intends to sell the product hoards it. In this case, people buying toilet paper are net harming the market. Sooner or later (manufacturer > retailer, or retailer > consumer) you have to raise prices to maintain liquidity.
  - gamblor956 7y ago
    How do you think profiteers operate? They buy large quantities of product, hoarding it until they can sell it for artificially inflated costs. People buying toilet paper to use it are not harming the market. They are the market. Yes, if they collectively buy more of it prices will eventually go up. But it happens a lot slower and equilibrium is reached at a much lower price than when profiteers are involved.
H8crilA 7y ago
It is, probably, pointless to argue the economics in this case, too much emotion involved. Also, price controls make sense in some cases. This is one of them.
- j88439h84 7y ago
  > This is one of them. Can you give an explanation for the curious?
  - H8crilA 7y ago
    Of price controls? The government says what (some) things have to cost, period. Typically accompanied with some quota mechanism (something like 10 pieces/head/week). Typical use cases: epidemics, wars, inflationary crises (arguable; I prefer the Paul Volker approach), other types of special situations when supply is scarce and the demand needs to be controlled. You could say most countries operate under constant price control of the most important price of them all: the price of money, or the price of time. I am talking about interest rates.
    - j88439h84 7y ago
      I mean why is an epidemic a good time to use price controls? In other words, why isn't it just another "market prices allocate goods to the most effective users" situation? People who are more vulnerable are willing to pay higher prices, and high prices incentivize rapid production increases, etc.
      - H8crilA 7y ago
        Depends on what you want from life, but I think that at the end of the day you want people to achieve some sort of "well being". Shocks can be alleviated by centralized action, after which we should quickly return to market pricing. The trouble is usually with the "return" part of the idea - just look at the endless QE that kept distorting the price of risk.
      - salawat 7y ago
        Willingness/capacity to pay a higher price != more effective user; merely a more financially advantaged one. Money, however, is not the be all, end all in life. Something it seems adherents of economics need to be reminded of from time to time.
- deleted 7y ago
  [deleted]

gamblor956 7y ago

No, profiteering disrupts liquidity in markets where it would otherwise have existed, if not for the profiteers hoarding activities.

rogerkirkness 7y ago
No, it doesn't. The difference is whether or not someone who intends to sell the product hoards it. In this case, people buying toilet paper are net harming the market. Sooner or later (manufacturer > retailer, or retailer > consumer) you have to raise prices to maintain liquidity.
- gamblor956 7y ago
  How do you think profiteers operate? They buy large quantities of product, hoarding it until they can sell it for artificially inflated costs. People buying toilet paper to use it are not harming the market. They are the market. Yes, if they collectively buy more of it prices will eventually go up. But it happens a lot slower and equilibrium is reached at a much lower price than when profiteers are involved.

H8crilA 7y ago

It is, probably, pointless to argue the economics in this case, too much emotion involved. Also, price controls make sense in some cases. This is one of them.

j88439h84 7y ago
> This is one of them. Can you give an explanation for the curious?
- H8crilA 7y ago
  Of price controls? The government says what (some) things have to cost, period. Typically accompanied with some quota mechanism (something like 10 pieces/head/week). Typical use cases: epidemics, wars, inflationary crises (arguable; I prefer the Paul Volker approach), other types of special situations when supply is scarce and the demand needs to be controlled. You could say most countries operate under constant price control of the most important price of them all: the price of money, or the price of time. I am talking about interest rates.
  - j88439h84 7y ago
    I mean why is an epidemic a good time to use price controls? In other words, why isn't it just another "market prices allocate goods to the most effective users" situation? People who are more vulnerable are willing to pay higher prices, and high prices incentivize rapid production increases, etc.
    - H8crilA 7y ago
      Depends on what you want from life, but I think that at the end of the day you want people to achieve some sort of "well being". Shocks can be alleviated by centralized action, after which we should quickly return to market pricing. The trouble is usually with the "return" part of the idea - just look at the endless QE that kept distorting the price of risk.
    - salawat 7y ago
      Willingness/capacity to pay a higher price != more effective user; merely a more financially advantaged one. Money, however, is not the be all, end all in life. Something it seems adherents of economics need to be reminded of from time to time.
deleted 7y ago
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