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There is an existing market solution to this, which is futures. Unless you sell onions (loooooong story) futures exist to insulate farmers from some of the fluc

There is an existing market solution to this, which is futures. Unless you sell onions (loooooong story) futures exist to insulate farmers from some of the fluctuation in markets and provide price signals for future planting (which is on the order of years, iirc 10 for a peach tree to become fully productive). It doesn't work perfectly and in fact can't. But it's there and it functions. Edit to add the other half of this: someone looking to buy a peach wants to eat a piece of fresh fruit or make a dessert, a season of high prices might mean they make more apple crumble and less peach cobbler. It's not the end of the world. There were many years when I was in the black cherry buying market for roughly six weeks a year, because I couldn't afford to eat them over four bucks a pound.

woodruffw 4y ago
Right! I didn't mean to imply that there weren't market solutions, only that they have somewhat absurd consequences on their tail ends (pure supply economics creates an "infinite" price for "none" peaches, futures can make markets less stable if you treat them as the speculative instruments that they fundamentally are.) Futures are probably the right choice. But they're fundamentally derivatives that paper over underlying supply and demand; their chief function is to shift who gets to raise prices and when, not to conjure more peaches.
- samatman 4y ago
  Infinite prices for nonexistent goods aren't a naked singularity, it represents something meaningful. Naive models don't engage with the information aspect of scarcity but the field of economics certainly does. Peaches never hit infinite price, there's too much production, but "I know a guy" certainly becomes part of the market-clearing mechanism, that boils down to reputational capital. Even in normal market conditions there are people making their living on that sort of capital, picture someone who can reliably get sashimi-grade fish at a less insane price.

woodruffw 4y ago

Right! I didn't mean to imply that there weren't market solutions, only that they have somewhat absurd consequences on their tail ends (pure supply economics creates an "infinite" price for "none" peaches, futures can make markets less stable if you treat them as the speculative instruments that they fundamentally are.) Futures are probably the right choice. But they're fundamentally derivatives that paper over underlying supply and demand; their chief function is to shift who gets to raise prices and when, not to conjure more peaches.

samatman 4y ago
Infinite prices for nonexistent goods aren't a naked singularity, it represents something meaningful. Naive models don't engage with the information aspect of scarcity but the field of economics certainly does. Peaches never hit infinite price, there's too much production, but "I know a guy" certainly becomes part of the market-clearing mechanism, that boils down to reputational capital. Even in normal market conditions there are people making their living on that sort of capital, picture someone who can reliably get sashimi-grade fish at a less insane price.