4 ms·

In capitalism there is a very simple solution for shortages: price increases. People still haven't realized that the solution is just to increase prices until o

In capitalism there is a very simple solution for shortages: price increases. People still haven't realized that the solution is just to increase prices until only enough people afford the products, so there won't be shortages anymore.

kibibyte 5y ago
This is exactly what's happening. Chips in high-demand have gotten very expensive. https://blog.flipperzero.one/manufacturing-and-shipping-update/ https://blog.flipperzero.one/manufacturing-and-shipping-upda...
engineer_22 5y ago
Few people consider a deflating economy a "solution".
- kqr 5y ago
  The point is that artificially keeping prices low does not improve the supply. If anything, it has the opposite effect. By raising prices on the high demand stuff, you send a signal to the people that can get by with alternative stuff that now is a good time to do so. So, like, highly hypothetically, if I couldn't find a calculator for a good price, I'm in a good seat to whip out my slide rule. This gives me an edge over the people who have to pay high prices for calculators, and simultaneously smooths out demand. What's good for me is also good for the people who really need calculators.
  - engineer_22 5y ago
    Yeah, that's high school macro. I didn't need an explanation, but it seems that you do. Optimally distributing fewer goods isn't a solution to the problem. The problem is a shortage.
    - kqr 5y ago
      I still don't see how reducing demand isn't a solution to excess demand. I'm honestly confused and would be happy if you could take the time to explain.
ip26 5y ago
How is that a solution? What happens when the good in question is food?
- axiolite 5y ago
  > What happens when the good in question is food? Prices go up on the food most people prefer to eat, first. People who cannot afford the foods they're accustomed to eating will switch to lower-priced foods they would never have considered otherwise. That's largely how tomatoes, potatoes, and more came into use... Desperate, hungry peasants. When food suppliers see the increase in price, they will work hard to squeeze more yield out of their existing supplies, and as soon as possible will invest in producing more (typically for next year). Others who are capable of producing food, but normally produce something else due to economics, will see the equation change in favor of food and switch their output. Famines are not caused or encouraged by supply/demand economics. It is vastly more common for communist governments to cause them.
  - ip26 5y ago
    I don’t have a problem with supply/demand economics, and certainly the market exerts pressure to economize like you say. I just take issue with the There’s no such thing as a shortage perspective.
    - josephcsible 5y ago
      There is such thing as a shortage, but persistent shortages are only possible due to government meddling.
  - engineer_22 5y ago
    Famine is a terrifying word to brandish so flippantly. God help us we don't find ourselves in a JIT situation with our staple crops. A famine would make COVID-19 look like a walk in the park on a Sunday afternoon.
- roenxi 5y ago
  It isn't a solution, it is a rejection of the problem. There isn't such a thing as a 'chip shortage', because that implies some natural number of chips that should exist. That number isn't a constant, it is a function of supply and demand. Therefore there is no such thing as a chip shortage. We'd maybe like prices to be higher or lower depending on our perspective. > What happens when the good in question is food? If there are 10 mouths and 9 meals then there is a food shortage. But that is a biological observation, not an economic one.

kibibyte 5y ago

This is exactly what's happening. Chips in high-demand have gotten very expensive. https://blog.flipperzero.one/manufacturing-and-shipping-update/ https://blog.flipperzero.one/manufacturing-and-shipping-upda...

engineer_22 5y ago

Few people consider a deflating economy a "solution".

kqr 5y ago
The point is that artificially keeping prices low does not improve the supply. If anything, it has the opposite effect. By raising prices on the high demand stuff, you send a signal to the people that can get by with alternative stuff that now is a good time to do so. So, like, highly hypothetically, if I couldn't find a calculator for a good price, I'm in a good seat to whip out my slide rule. This gives me an edge over the people who have to pay high prices for calculators, and simultaneously smooths out demand. What's good for me is also good for the people who really need calculators.
- engineer_22 5y ago
  Yeah, that's high school macro. I didn't need an explanation, but it seems that you do. Optimally distributing fewer goods isn't a solution to the problem. The problem is a shortage.
  - kqr 5y ago
    I still don't see how reducing demand isn't a solution to excess demand. I'm honestly confused and would be happy if you could take the time to explain.

ip26 5y ago

How is that a solution? What happens when the good in question is food?

axiolite 5y ago
> What happens when the good in question is food? Prices go up on the food most people prefer to eat, first. People who cannot afford the foods they're accustomed to eating will switch to lower-priced foods they would never have considered otherwise. That's largely how tomatoes, potatoes, and more came into use... Desperate, hungry peasants. When food suppliers see the increase in price, they will work hard to squeeze more yield out of their existing supplies, and as soon as possible will invest in producing more (typically for next year). Others who are capable of producing food, but normally produce something else due to economics, will see the equation change in favor of food and switch their output. Famines are not caused or encouraged by supply/demand economics. It is vastly more common for communist governments to cause them.
- ip26 5y ago
  I don’t have a problem with supply/demand economics, and certainly the market exerts pressure to economize like you say. I just take issue with the There’s no such thing as a shortage perspective.
  - josephcsible 5y ago
    There is such thing as a shortage, but persistent shortages are only possible due to government meddling.
- engineer_22 5y ago
  Famine is a terrifying word to brandish so flippantly. God help us we don't find ourselves in a JIT situation with our staple crops. A famine would make COVID-19 look like a walk in the park on a Sunday afternoon.
roenxi 5y ago
It isn't a solution, it is a rejection of the problem. There isn't such a thing as a 'chip shortage', because that implies some natural number of chips that should exist. That number isn't a constant, it is a function of supply and demand. Therefore there is no such thing as a chip shortage. We'd maybe like prices to be higher or lower depending on our perspective. > What happens when the good in question is food? If there are 10 mouths and 9 meals then there is a food shortage. But that is a biological observation, not an economic one.