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In the book The Affordable City [0], this is illustrated with a really powerful analogy: Every year in the United States, the Toyota motor company sells about

In the book The Affordable City [0], this is illustrated with a really powerful analogy: Every year in the United States, the Toyota motor company sells about 2 million regular Toyota cars and 300,000 expensive luxury Lexus cars. Suppose that we introduced a law that each motor company can only sell 300,000 cars a year. Which cars would Toyota continue to make? [0] https://islandpress.org/books/affordable-city https://islandpress.org/books/affordable-city [1] https://pressroom.toyota.com/toyota-motor-north-america-reports-u-s-december-year-end-2021-sales/ https://pressroom.toyota.com/toyota-motor-north-america-repo...

david38 4y ago
Precisely why the law should really say that making X affordable cars per year buys you right to sell 1 luxury car. You actually want it more complicated than that, maybe something like for every dollar of affordability you sell (under $X), you earn the right to sell $0.10 worth of luxury.
- mixmastamyk 4y ago
  The solution isn't to put a band-aid on it. But to get out of the way as much as possible. If you prohibit most profit you prohibit most progress.
  - Red_Leaves_Flyy 4y ago
    Profit should not be a thing in housing, healthcare, or food until everyone is housed, cared for, and fed.
    - lazide 4y ago
      Why should someone go through all the effort to do that if they aren’t getting paid for it?
      - Red_Leaves_Flyy 4y ago
        The workers get a livable wage. The organization breaks even.
        lazide 4y ago
        Who is going to organize said organization and deal with all the BS (petty and not) to make a livable wage, if they can do simpler and get the same, or do the same and get paid more? A few will, but most won’t. The amount of risk to develop and the type of skills required are non trivial.
        snapplebobapple 4y ago
        a livable wage is a really bad metric because the definition of living is extremely subjective. We had it right initially with market derived wages. This talk of living wages is keeping us from real discussions about market power abuse/monopsony/oligopsony situations in the labor market that would improve labor market efficiency a lot more than arguing over what a living wage is.
    - xwdv 4y ago
      Without profit many more will go unhoused, unfed, and definitely uncared for.
    - mixmastamyk 4y ago
      A nice platitude. What are you doing to achieve it? My guess is nothing, because you have bills to pay, like everyone else. The reality is that if all those things were provided population would grow unchecked until resources ran out. It’s not sustainable. On the other extreme, we can do a lot better than artificial scarcity.
  - xref 4y ago
    Pretty sure Upton Sinclair debunked that theory over 100 years ago
    - mixmastamyk 4y ago
      Pretty sure he didn’t ‘debunk’ economics.
- returningfory2 4y ago
  There exists a market equilibrium (2 million regular cars, 300k luxury cars, in the Toyota analogy). You're proposing to construct a regulatory scheme to reach a different equilibrium. Why? What's wrong with the market equilibrium?
  - Silhouette 4y ago
    You're proposing to construct a regulatory scheme to reach a different equilibrium. Why? What's wrong with the market equilibrium? In the context of cars, arguably nothing. In the original context of real estate, all kinds of things, because having somewhere to live is essential to quality of life and reserving more of the finite real estate available for development for a few luxury homes means a lot more regular homes that could house a lot more families can't be built there instead.
  - dagw 4y ago
    Toyota aren't constrained in how many cars they can make a year (well, more or less, and under normal circumstances), housing developers are much more constrained. In a world (kind of like the one we live in right now...) where Toyota only had components to build 500k cars a year then they'll make 300k luxury cars and 200k regular cars and buying cheap low end cars becomes almost impossible. If the market equilibrium in an unrestricted market is 2mil:300k, or roughly 6:1, regular to luxury cars then an argument could be made that regulations should be but in place to retain that market equilibrium even during a restricted market, assuming we believe it is important that everyone can own a car.
    - Schiendelman 4y ago
      The restriction on the market is largely arbitrary - people “don’t wanna” let other people build apartments on land they own. The only real reason they do this is regulatory capture - if someone who owns land slows housing production on other people’s land, theirs is worth more.
- jrs235 4y ago
  Like "earn a buck" in Wisconsin. The DNR is trying to manage the herd and keep the deer numbers in check. Before you can get a buck tag you first get a doe tag and must turn in a doe to get your buck tag.
- snapplebobapple 4y ago
  This line of reasoning is why systems collapse. You are proposing adding further regulation on top of a mountain of existing regulation without considering the problem is probably bottlenecks caused by existing regulation.
deleted 4y ago
[deleted]
eesmith 4y ago
Simple: Toyota would stop being a motor company. It would instead start 10 new motor companies, and a parts manufacturing supplier system for those motor companies, and keep controlling interest in those new companies. More deeply, I don't understand how it's analogous. Why are companies prohibited from selling more than 300K cars? Is it because of too-high pollution (CO2 emissions, tire micro particles, etc.)? Is it because of a mass desire to switch to public transit systems? To stop having so many traffic deaths? If so, then the laws will likely result in a ban on the total number of new cars, or at least higher import fees and higher tax rate. And these all shift the economics of what Toyota would produce. As an unlikely case, if the laws were passed due to a mass movement against displays of wealth, such that private car ownership is frowned upon and luxury cars frequently get vandalized, then Toyota isn't going to make many Lexus sales at all.
- tpoacher 4y ago
  You're choosing to interpret the analogy outside of the bounds implied by the argument it is supposed to relate to. In which case the rebuttal to your argument is as simple as adding another arbitrary layer of assumptions that do not generalise, in order to restrict your use of arbitrary assumptions that do not generalise, e.g "the government will not allow that split, back to discussing the original scenario."

david38 4y ago

Precisely why the law should really say that making X affordable cars per year buys you right to sell 1 luxury car. You actually want it more complicated than that, maybe something like for every dollar of affordability you sell (under $X), you earn the right to sell $0.10 worth of luxury.

mixmastamyk 4y ago
The solution isn't to put a band-aid on it. But to get out of the way as much as possible. If you prohibit most profit you prohibit most progress.
- Red_Leaves_Flyy 4y ago
  Profit should not be a thing in housing, healthcare, or food until everyone is housed, cared for, and fed.
  - lazide 4y ago
    Why should someone go through all the effort to do that if they aren’t getting paid for it?
    - Red_Leaves_Flyy 4y ago
      The workers get a livable wage. The organization breaks even.
      - lazide 4y ago
        Who is going to organize said organization and deal with all the BS (petty and not) to make a livable wage, if they can do simpler and get the same, or do the same and get paid more? A few will, but most won’t. The amount of risk to develop and the type of skills required are non trivial.
      - snapplebobapple 4y ago
        a livable wage is a really bad metric because the definition of living is extremely subjective. We had it right initially with market derived wages. This talk of living wages is keeping us from real discussions about market power abuse/monopsony/oligopsony situations in the labor market that would improve labor market efficiency a lot more than arguing over what a living wage is.
  - xwdv 4y ago
    Without profit many more will go unhoused, unfed, and definitely uncared for.
  - mixmastamyk 4y ago
    A nice platitude. What are you doing to achieve it? My guess is nothing, because you have bills to pay, like everyone else. The reality is that if all those things were provided population would grow unchecked until resources ran out. It’s not sustainable. On the other extreme, we can do a lot better than artificial scarcity.
- xref 4y ago
  Pretty sure Upton Sinclair debunked that theory over 100 years ago
  - mixmastamyk 4y ago
    Pretty sure he didn’t ‘debunk’ economics.
returningfory2 4y ago
There exists a market equilibrium (2 million regular cars, 300k luxury cars, in the Toyota analogy). You're proposing to construct a regulatory scheme to reach a different equilibrium. Why? What's wrong with the market equilibrium?
- Silhouette 4y ago
  You're proposing to construct a regulatory scheme to reach a different equilibrium. Why? What's wrong with the market equilibrium? In the context of cars, arguably nothing. In the original context of real estate, all kinds of things, because having somewhere to live is essential to quality of life and reserving more of the finite real estate available for development for a few luxury homes means a lot more regular homes that could house a lot more families can't be built there instead.
- dagw 4y ago
  Toyota aren't constrained in how many cars they can make a year (well, more or less, and under normal circumstances), housing developers are much more constrained. In a world (kind of like the one we live in right now...) where Toyota only had components to build 500k cars a year then they'll make 300k luxury cars and 200k regular cars and buying cheap low end cars becomes almost impossible. If the market equilibrium in an unrestricted market is 2mil:300k, or roughly 6:1, regular to luxury cars then an argument could be made that regulations should be but in place to retain that market equilibrium even during a restricted market, assuming we believe it is important that everyone can own a car.
  - Schiendelman 4y ago
    The restriction on the market is largely arbitrary - people “don’t wanna” let other people build apartments on land they own. The only real reason they do this is regulatory capture - if someone who owns land slows housing production on other people’s land, theirs is worth more.
jrs235 4y ago
Like "earn a buck" in Wisconsin. The DNR is trying to manage the herd and keep the deer numbers in check. Before you can get a buck tag you first get a doe tag and must turn in a doe to get your buck tag.
snapplebobapple 4y ago
This line of reasoning is why systems collapse. You are proposing adding further regulation on top of a mountain of existing regulation without considering the problem is probably bottlenecks caused by existing regulation.

deleted 4y ago

[deleted]

eesmith 4y ago

Simple: Toyota would stop being a motor company. It would instead start 10 new motor companies, and a parts manufacturing supplier system for those motor companies, and keep controlling interest in those new companies. More deeply, I don't understand how it's analogous. Why are companies prohibited from selling more than 300K cars? Is it because of too-high pollution (CO2 emissions, tire micro particles, etc.)? Is it because of a mass desire to switch to public transit systems? To stop having so many traffic deaths? If so, then the laws will likely result in a ban on the total number of new cars, or at least higher import fees and higher tax rate. And these all shift the economics of what Toyota would produce. As an unlikely case, if the laws were passed due to a mass movement against displays of wealth, such that private car ownership is frowned upon and luxury cars frequently get vandalized, then Toyota isn't going to make many Lexus sales at all.

tpoacher 4y ago
You're choosing to interpret the analogy outside of the bounds implied by the argument it is supposed to relate to. In which case the rebuttal to your argument is as simple as adding another arbitrary layer of assumptions that do not generalise, in order to restrict your use of arbitrary assumptions that do not generalise, e.g "the government will not allow that split, back to discussing the original scenario."