5 ms·

It is truly painful to see how little people seem to understand or appreciate the living organism that is human action in the aggregate. Large surges in demand

by epr 7y ago

It is truly painful to see how little people seem to understand or appreciate the living organism that is human action in the aggregate. Large surges in demand which are inevitably met with price increases are signals to other parts of the organism to send goods where they are needed. Higher prices encourage a balance of needs and responsible budgeting so individual cells don't simply take all that is available to the detriment of the organism as a whole.

wtallis 7y ago
> Higher prices encourage a balance of needs and responsible budgeting so individual cells don't simply take all that is available to the detriment of the organism as a whole. Aren't you making a fairly unreasonable assumption that need is also accompanied by ability to pay elevated prices?
- epr 7y ago
  Not at all, hence the word "encourage" instead of something more absolute like "enforce". The distinction between a "want" and "need" is very tough to make beyond physical reality bound calculations of measurable requirements for survival like calories or materials required to build a shelter that could keep a human alive under adverse environmental conditions. I mean nothing specific like that by the use of the word "need".
  - wtallis 7y ago
    The distinction between "want" and "need" can be made in practice. Doctors have been publicizing what they know about risk factors for COVID19. If you don't fall into one of those categories, you're in the "want" crowd, not the "need" crowd. Which of those classifications you fall into has no correlation to your ability to afford personal protective equipment. Price gouging can easily make a scarce critical good unobtainable to poor people who need it before the price is high enough to discourage all the rich panicking hoarders/preppers.
TeMPOraL 7y ago
That works only if there's a reasonable way to meet the increased demand. The prices go up, which increases more manufacturing and more entrepreneurs moving inventory from different areas to ones with need. In emergencies like this, there isn't enough supply available anywhere to meet demand. The manufacturers can't scale fast enough - and even if they could, they're often unwilling; scaling up has large up-front costs, so it's not worth doing if the demand is going to evaporate before they can recoup their costs. The right solution here is for the governments to start issuing very large orders, thus ensuring the manufacturers can scale up without worries, while distributing the masks to everyone in an equal fashion. And jailing the price gougers for profiteering off global emergency while we're at it.
- epr 7y ago
  > In emergencies like this, there isn't enough supply available anywhere to meet demand In the presence of price gouging laws perhaps, but not in general. I of course acknowledge the overhead cost of retrofitting existing manufacturing setups to produce masks, but that doesn't mean they can't still turn a profit, especially if they are not prevented from selling internationally by well intended but misguided laws.
  - wtallis 7y ago
    > In the presence of price gouging laws perhaps, but not in general. I of course acknowledge the overhead cost of retrofitting existing manufacturing setups to produce masks, Price gouging laws do not change the underlying facts of how long it takes to spin up new production lines. In an emergency, suppliers cannot respond quickly enough, by definition. The problem to be solved is how best to allocate existing stocks and production output, not how to incentivize new producers.
    - epr 7y ago
      > Price gouging laws do not change the underlying facts of how long it takes to spin up new production lines. Of course they don't. What they do accomplish is preventing prices from rising quickly enough to justify new production lines. It really comes down to if manufacturers think they can make enough to cover the costs of changing production lines to the emergency good, then turning them back, and then some. This is compared to how much they make doing what they have always done. Price gouging laws lower the profits they would make.

by epr 7y ago

wtallis 7y ago

> Higher prices encourage a balance of needs and responsible budgeting so individual cells don't simply take all that is available to the detriment of the organism as a whole. Aren't you making a fairly unreasonable assumption that need is also accompanied by ability to pay elevated prices?

epr 7y ago
Not at all, hence the word "encourage" instead of something more absolute like "enforce". The distinction between a "want" and "need" is very tough to make beyond physical reality bound calculations of measurable requirements for survival like calories or materials required to build a shelter that could keep a human alive under adverse environmental conditions. I mean nothing specific like that by the use of the word "need".
- wtallis 7y ago
  The distinction between "want" and "need" can be made in practice. Doctors have been publicizing what they know about risk factors for COVID19. If you don't fall into one of those categories, you're in the "want" crowd, not the "need" crowd. Which of those classifications you fall into has no correlation to your ability to afford personal protective equipment. Price gouging can easily make a scarce critical good unobtainable to poor people who need it before the price is high enough to discourage all the rich panicking hoarders/preppers.

TeMPOraL 7y ago

That works only if there's a reasonable way to meet the increased demand. The prices go up, which increases more manufacturing and more entrepreneurs moving inventory from different areas to ones with need. In emergencies like this, there isn't enough supply available anywhere to meet demand. The manufacturers can't scale fast enough - and even if they could, they're often unwilling; scaling up has large up-front costs, so it's not worth doing if the demand is going to evaporate before they can recoup their costs. The right solution here is for the governments to start issuing very large orders, thus ensuring the manufacturers can scale up without worries, while distributing the masks to everyone in an equal fashion. And jailing the price gougers for profiteering off global emergency while we're at it.

epr 7y ago
> In emergencies like this, there isn't enough supply available anywhere to meet demand In the presence of price gouging laws perhaps, but not in general. I of course acknowledge the overhead cost of retrofitting existing manufacturing setups to produce masks, but that doesn't mean they can't still turn a profit, especially if they are not prevented from selling internationally by well intended but misguided laws.
- wtallis 7y ago
  > In the presence of price gouging laws perhaps, but not in general. I of course acknowledge the overhead cost of retrofitting existing manufacturing setups to produce masks, Price gouging laws do not change the underlying facts of how long it takes to spin up new production lines. In an emergency, suppliers cannot respond quickly enough, by definition. The problem to be solved is how best to allocate existing stocks and production output, not how to incentivize new producers.
  - epr 7y ago
    > Price gouging laws do not change the underlying facts of how long it takes to spin up new production lines. Of course they don't. What they do accomplish is preventing prices from rising quickly enough to justify new production lines. It really comes down to if manufacturers think they can make enough to cover the costs of changing production lines to the emergency good, then turning them back, and then some. This is compared to how much they make doing what they have always done. Price gouging laws lower the profits they would make.