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But that's the point. There are always going to be distortions. And only some of those distortions come from the government. Perfect markets don't exist and

But that's the point. There are always going to be distortions. And only some of those distortions come from the government. Perfect markets don't exist and can't exist. They don't line up incentives as advertised, the incentive for the producer to take as much as possible from the consumer drives all kinds of insane and harmful unexpected behavior. And market competition doesn't keep that incentive in check as the theory holds, because all producers share the same incentive and their interests align. Government distortions are sometimes self serving as you've pointed out, but just as often they are attempts to counter act the distortions created by the markets themselves. Economic theory has never been predictive to any reasonable margin of error. And a theory that cannot predict outcomes is not a valid theory.

nanis 5y ago
> Perfect markets don't exist and can't exist. Even diamonds are not perfect. Perfection is good to have in models to demonstrate limiting cases, but not necessary to know the difference between situations where prices are allowed adjust and where prices are not allowed to adjust. The "markets are not perfect" crowd loves to imagine the existence of a "perfect" and benevolent social planner who will always act according to their wishes. Let me know when you find one. (I know, "#realsocialism never been tried). > Economic theory has never been predictive to any reasonable margin of error. And a theory that cannot predict outcomes is not a valid theory. I find it ironic that you make this statement in the context of a clear cut demonstration of what happens when prices are not allowed to adjust. There are a zillion markets across the world where one does not need to depend on the benevolence of the proprietor to get what you want or the benevolence of the customer to earn a living. Those get conveniently ignored. If price controls worked so wonderfully, Uber, which was only an improvement on what was there before it and nothing close to "perfect", would not have become so popular. I would have loved for them to run a continuous double auction, but then nobody every gave me a billion dollars to burn. > distortions created by the markets By definition, distortions are created by interventions in markets.

nanis 5y ago

> Perfect markets don't exist and can't exist. Even diamonds are not perfect. Perfection is good to have in models to demonstrate limiting cases, but not necessary to know the difference between situations where prices are allowed adjust and where prices are not allowed to adjust. The "markets are not perfect" crowd loves to imagine the existence of a "perfect" and benevolent social planner who will always act according to their wishes. Let me know when you find one. (I know, "#realsocialism never been tried). > Economic theory has never been predictive to any reasonable margin of error. And a theory that cannot predict outcomes is not a valid theory. I find it ironic that you make this statement in the context of a clear cut demonstration of what happens when prices are not allowed to adjust. There are a zillion markets across the world where one does not need to depend on the benevolence of the proprietor to get what you want or the benevolence of the customer to earn a living. Those get conveniently ignored. If price controls worked so wonderfully, Uber, which was only an improvement on what was there before it and nothing close to "perfect", would not have become so popular. I would have loved for them to run a continuous double auction, but then nobody every gave me a billion dollars to burn. > distortions created by the markets By definition, distortions are created by interventions in markets.