3 ms·

You shouldn't limit price value or velocity, as evidenced by the perverse effects of rent control laws. However, a limit on price acceleration could provide a

by xapata 7y ago

You shouldn't limit price value or velocity, as evidenced by the perverse effects of rent control laws. However, a limit on price acceleration could provide a good balance, allowing the market to adjust on a reasonable time-scale, such that humans can react. That's my theory for immigration controls as well. Economic theory suggests that unlimited flow of human capital is just as valuable as unlimited flow of financial capital. However, we know that shock movements of financial capital can be bad, and instinctively people dislike shock movements of people. A good solution for both is to limit not velocity, but acceleration. The economy can absorb a steady flow, but needs time to react to rate changes.

dahart 7y ago
Interesting, an acceleration cap might be just fine, and easier to tune correctly & get political agreement on. I agree with you that the economy needs time to react to rate changes. The problem with rent control is sometimes it's implemented as a value cap, and sometimes it's a rate cap that is too low. I wouldn't rule out rate caps just because someone somewhere set the rate too low. I do want to counter the idea that caps are bad just because something bad happened in some cases. That's not enough to prove that price caps are always wrong. I know price caps can cause problems sometimes. But not having any regulation can cause problems as well, and there's also plenty of evidence for this. Pollution and global warming is already starting to have massive global economic effects, and the costs and causes of it have been externalized by corporations for a hundred years. All of the free market "success" that has been enjoyed by global manufacturers is starting to cost humanity, and our children are going to need to re-evaluate whether letting the companies operate as freely as they did with our air and land and water was a good idea. There's a growing global consensus that it was not. The implications of that on free market thinking are that we need to understand and acknowledge that some freedoms come with invisible or unaccountable costs, and/or very late costs. And sometimes these costs can outweigh all the short-term benefit. Companies can come, make billions, last for a generation, and die before we even know what the cost was. No amount of waxing laissez faire philosophy can undo the actual damage we've already done.

by xapata 7y ago

dahart 7y ago

Interesting, an acceleration cap might be just fine, and easier to tune correctly & get political agreement on. I agree with you that the economy needs time to react to rate changes. The problem with rent control is sometimes it's implemented as a value cap, and sometimes it's a rate cap that is too low. I wouldn't rule out rate caps just because someone somewhere set the rate too low. I do want to counter the idea that caps are bad just because something bad happened in some cases. That's not enough to prove that price caps are always wrong. I know price caps can cause problems sometimes. But not having any regulation can cause problems as well, and there's also plenty of evidence for this. Pollution and global warming is already starting to have massive global economic effects, and the costs and causes of it have been externalized by corporations for a hundred years. All of the free market "success" that has been enjoyed by global manufacturers is starting to cost humanity, and our children are going to need to re-evaluate whether letting the companies operate as freely as they did with our air and land and water was a good idea. There's a growing global consensus that it was not. The implications of that on free market thinking are that we need to understand and acknowledge that some freedoms come with invisible or unaccountable costs, and/or very late costs. And sometimes these costs can outweigh all the short-term benefit. Companies can come, make billions, last for a generation, and die before we even know what the cost was. No amount of waxing laissez faire philosophy can undo the actual damage we've already done.