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> the marketplace failed to provide both affordable milk and the ability for dairy farmers to make a living. So the price is both two low and too high? This i

> the marketplace failed to provide both affordable milk and the ability for dairy farmers to make a living. So the price is both two low and too high? This is not a failure of the marketplace (aka price discovery), this is the U.S. deciding that cheap milk and overproduction is in the nation's best interest and we should socialize some of the production costs. There are logical (milk as a staple product and avoidance of shortages), and illogical (milk lobby takes too much effort to oppose) reasons for it, but it is not a marketplace failure. Remove the subsidies and the market would quickly find the higher price at which dairy farmers could produce milk profitably and consumers would purchase it.

bumby 6y ago
Aren't there cases where the market fails when considered in broader context? E.g., the market decides to off-shore manufacturing. This is good short-term as it leads to lower prices for consumers. But it's also potentially a failure at a national long-term level as it has reduced our manufacturing capacity. The short-term bias of the market can adversely affect long lead-time strategic interests. See: the inability to quickly pivot to manufacture medical goods in a pandemic or military goods in a large-scale conflict. These types of market failures are what lead to the socialization that you mention.
- deleted 6y ago
  [deleted]
- nybble41 6y ago
  > But it's also potentially a failure at a national long-term level as it has reduced our manufacturing capacity. That isn't a market failure. It's just a recognition that the economy is global, not national. The market doesn't optimize for the benefit of one nation against others. As for "short-term bias", the market just reflects the biases of the people making the decisions—the same as any other system. If people are inclined to stockpile medical supplies or materiel for self-defense, the market will support that too. The market's only real "failure" is that it's too democratic for the liking of certain individuals who feel they have a better idea of how a society should be organized than the poor, ignorant, gullible masses that actually comprise that society.
  - whimsicalism 6y ago
    > The market's only real "failure" is that it's too democratic for the liking of certain individuals It's interesting to see this sort of rhetoric re-emerge after it took a long break after the '08 recession. Of course, the idea that the market is "too democratic" is absurd. At least, I haven't seen a democratic system where 1% of the population gets 40% of the vote. As long as "willingness to pay" is the market proxy for the utility a consumer gets from a good, the market is not "democratic".
    - nybble41 6y ago
      > At least, I haven't seen a democratic system where 1% of the population gets 40% of the vote. In a pure voluntaryist market system everyone gets 100% of the vote (i.e. veto power) when it comes to how they use their own labor and resources. If one has acquired more wealth then one has more options available and more decisions to make, but still doesn't get any direct say in how other people use their property, no matter how rich or poor they may be. This is far more egalitarian and in keeping with the ideals espoused by most democracies than the idea that every person's freedoms and property are subject to a glorified opinion poll.
      - whimsicalism 6y ago
        > everyone gets 100% of the vote (i.e. veto power) when it comes to how they use their own labor and resources Yeah, so uh... not democracy. I'm not going to relitigate the entirety of Anarchy, State & Utopia in the HN comments section, but suffice to say that these ideals are far from objectively "egalitarian" and the idea that other's negative, non-inferential side-constraints must be sometimes violated in the context of social cooperation is actually foundational to republican (as in the political philosophy) thought.
        nybble41 6y ago
        It's not direct democracy, but those systems are rare. Everything else is quibbling over details. What most people mean when they say "democracy" has little to do with voting and everything to do with the protection of rights for minorities… which is much closer to voluntaryism than direct democracy.
whimsicalism 6y ago
> not a marketplace failure. Remove the subsidies and the market would quickly find the higher price at which dairy farmers could produce milk profitably and consumers would purchase it. If it is in our societal interest to produce more milk so people can eat, and the market doesn't do so, requiring subsidy, then that is a failure of the market to meet society's need. You're conflating the failure of a marketplace to function properly (as in smooth functioning of supply, demand, liquidity, etc) with the failure of the marketplace to provide social benefit.
- dontbeevil1992 6y ago
  for certain people, the point of a market is not to meet people's needs, it is to "function efficiently," so they'll never think a failure to meet society's need is a market failure, that's just "the way things are, money doesn't grow on trees commie!"
  - nickff 6y ago
    'Market failure' is a term of art, and it's generally best to avoid redefining terms of art unless there's a very compelling reason to do so. Failing to meet people's needs is definitely a problem, but not a uniquely market-driven one. If there is a specific phenomenon which causes markets to fail in the delivery of socially desirable goods, it would be good to come up with a specific description and corresponding term of art.
    - whimsicalism 6y ago
      Reread the thread. > 'Market failure' is a term of art, and it's generally best to avoid redefining terms of art unless there's a very compelling reason to do so. The person conflating "market failure" with what they were talking about is the GP. The original comment was about the market failing to accomplish a goal, which is a perfectly idiomatic usage.
      - nickff 6y ago
        I sort-of agree with you, but I was directly responding to the phrase: >"... they'll never think a failure to meet society's need is a market failure..."
cmrdporcupine 6y ago
A subsidy to a private corporation is not "socializing" production costs. Socialization is putting goods under social control. This is literally the opposite -- providing benefits to private interests. Even if the end has the appearance of being for the social good, in reality this has more to do with the power of the private dairy lobby than any pricing concerns about availability of milk. That dairy producer's lobby is quite powerful and politically important to both parties. See the key role they played in the politics Trump was playing around NAFTA renegotiations last year.
- asdfasgasdgasdg 6y ago
  "Socializing costs" is a widely used term to describe the phenomenon of the public taking on private costs for some real or perceived benefit.
  - cmrdporcupine 6y ago
    Frankly, this way of talking seems to have its origin in the 2008 financial crisis more than in any actual technical economic language (https://www.cnbc.com/id/34921639 https://www.cnbc.com/id/34921639). And it speaks more to American's mis-education about what socialism is (or its history) than anything else. Apparently HN does not agree with me, I challenge my downvoting fans to find citations for "socializing losses" in the way you're talking about, prior to 2008. "Lemon socialism" (gov't bailing out lemons) existed, but that actually has a different tone entirely.
    - asdfasgasdgasdg 6y ago
      Your comments don't appear gray to me, so not sure what downvotes you're referencing. But allow me to channel my inner HN and humbly suggest that the downvotes you're receiving, such as they are, arise from your assumption that if terminology is not "technical economic language," it is incorrect. You replied to a person who used a commonly understood term correctly and you claimed it was incorrect. Now you're saying that the terminology didn't come to have the current meaning until 2008. But I'm not seeing the connection between that and whether the terminology is appropriate to the current context. Why would anyone bother to cite you a source of this terminology before 2008? Nobody has even referenced a claim that the terminology is older than that. It's a non sequitur to observe that the terminology is young. The long and the short of it is that the person you originally responded to was correct to call the behavior "socializing costs." You were incorrect in your response where you claimed that a subsidy is not "socializing costs," since that's exactly what the term means in common parlance. The downvotes probably come from your not recognizing and admitting your mistake.
JAlexoid 6y ago
Milk has become a staple, because of overproduction. We used to consume much less milk pre-WWII. And we are consuming less and less cow's milk.

bumby 6y ago

Aren't there cases where the market fails when considered in broader context? E.g., the market decides to off-shore manufacturing. This is good short-term as it leads to lower prices for consumers. But it's also potentially a failure at a national long-term level as it has reduced our manufacturing capacity. The short-term bias of the market can adversely affect long lead-time strategic interests. See: the inability to quickly pivot to manufacture medical goods in a pandemic or military goods in a large-scale conflict. These types of market failures are what lead to the socialization that you mention.

deleted 6y ago
[deleted]
nybble41 6y ago
> But it's also potentially a failure at a national long-term level as it has reduced our manufacturing capacity. That isn't a market failure. It's just a recognition that the economy is global, not national. The market doesn't optimize for the benefit of one nation against others. As for "short-term bias", the market just reflects the biases of the people making the decisions—the same as any other system. If people are inclined to stockpile medical supplies or materiel for self-defense, the market will support that too. The market's only real "failure" is that it's too democratic for the liking of certain individuals who feel they have a better idea of how a society should be organized than the poor, ignorant, gullible masses that actually comprise that society.
- whimsicalism 6y ago
  > The market's only real "failure" is that it's too democratic for the liking of certain individuals It's interesting to see this sort of rhetoric re-emerge after it took a long break after the '08 recession. Of course, the idea that the market is "too democratic" is absurd. At least, I haven't seen a democratic system where 1% of the population gets 40% of the vote. As long as "willingness to pay" is the market proxy for the utility a consumer gets from a good, the market is not "democratic".
  - nybble41 6y ago
    > At least, I haven't seen a democratic system where 1% of the population gets 40% of the vote. In a pure voluntaryist market system everyone gets 100% of the vote (i.e. veto power) when it comes to how they use their own labor and resources. If one has acquired more wealth then one has more options available and more decisions to make, but still doesn't get any direct say in how other people use their property, no matter how rich or poor they may be. This is far more egalitarian and in keeping with the ideals espoused by most democracies than the idea that every person's freedoms and property are subject to a glorified opinion poll.
    - whimsicalism 6y ago
      > everyone gets 100% of the vote (i.e. veto power) when it comes to how they use their own labor and resources Yeah, so uh... not democracy. I'm not going to relitigate the entirety of Anarchy, State & Utopia in the HN comments section, but suffice to say that these ideals are far from objectively "egalitarian" and the idea that other's negative, non-inferential side-constraints must be sometimes violated in the context of social cooperation is actually foundational to republican (as in the political philosophy) thought.
      - nybble41 6y ago
        It's not direct democracy, but those systems are rare. Everything else is quibbling over details. What most people mean when they say "democracy" has little to do with voting and everything to do with the protection of rights for minorities… which is much closer to voluntaryism than direct democracy.

whimsicalism 6y ago

> not a marketplace failure. Remove the subsidies and the market would quickly find the higher price at which dairy farmers could produce milk profitably and consumers would purchase it. If it is in our societal interest to produce more milk so people can eat, and the market doesn't do so, requiring subsidy, then that is a failure of the market to meet society's need. You're conflating the failure of a marketplace to function properly (as in smooth functioning of supply, demand, liquidity, etc) with the failure of the marketplace to provide social benefit.

dontbeevil1992 6y ago
for certain people, the point of a market is not to meet people's needs, it is to "function efficiently," so they'll never think a failure to meet society's need is a market failure, that's just "the way things are, money doesn't grow on trees commie!"
- nickff 6y ago
  'Market failure' is a term of art, and it's generally best to avoid redefining terms of art unless there's a very compelling reason to do so. Failing to meet people's needs is definitely a problem, but not a uniquely market-driven one. If there is a specific phenomenon which causes markets to fail in the delivery of socially desirable goods, it would be good to come up with a specific description and corresponding term of art.
  - whimsicalism 6y ago
    Reread the thread. > 'Market failure' is a term of art, and it's generally best to avoid redefining terms of art unless there's a very compelling reason to do so. The person conflating "market failure" with what they were talking about is the GP. The original comment was about the market failing to accomplish a goal, which is a perfectly idiomatic usage.
    - nickff 6y ago
      I sort-of agree with you, but I was directly responding to the phrase: >"... they'll never think a failure to meet society's need is a market failure..."

cmrdporcupine 6y ago

A subsidy to a private corporation is not "socializing" production costs. Socialization is putting goods under social control. This is literally the opposite -- providing benefits to private interests. Even if the end has the appearance of being for the social good, in reality this has more to do with the power of the private dairy lobby than any pricing concerns about availability of milk. That dairy producer's lobby is quite powerful and politically important to both parties. See the key role they played in the politics Trump was playing around NAFTA renegotiations last year.

asdfasgasdgasdg 6y ago
"Socializing costs" is a widely used term to describe the phenomenon of the public taking on private costs for some real or perceived benefit.
- cmrdporcupine 6y ago
  Frankly, this way of talking seems to have its origin in the 2008 financial crisis more than in any actual technical economic language (https://www.cnbc.com/id/34921639 https://www.cnbc.com/id/34921639). And it speaks more to American's mis-education about what socialism is (or its history) than anything else. Apparently HN does not agree with me, I challenge my downvoting fans to find citations for "socializing losses" in the way you're talking about, prior to 2008. "Lemon socialism" (gov't bailing out lemons) existed, but that actually has a different tone entirely.
  - asdfasgasdgasdg 6y ago
    Your comments don't appear gray to me, so not sure what downvotes you're referencing. But allow me to channel my inner HN and humbly suggest that the downvotes you're receiving, such as they are, arise from your assumption that if terminology is not "technical economic language," it is incorrect. You replied to a person who used a commonly understood term correctly and you claimed it was incorrect. Now you're saying that the terminology didn't come to have the current meaning until 2008. But I'm not seeing the connection between that and whether the terminology is appropriate to the current context. Why would anyone bother to cite you a source of this terminology before 2008? Nobody has even referenced a claim that the terminology is older than that. It's a non sequitur to observe that the terminology is young. The long and the short of it is that the person you originally responded to was correct to call the behavior "socializing costs." You were incorrect in your response where you claimed that a subsidy is not "socializing costs," since that's exactly what the term means in common parlance. The downvotes probably come from your not recognizing and admitting your mistake.

JAlexoid 6y ago

Milk has become a staple, because of overproduction. We used to consume much less milk pre-WWII. And we are consuming less and less cow's milk.