4 ms·

>By giving money to people without producing more stuff - or even making it harder to produce the same - you MUST have inflation, rationing, or empty shelves -

>By giving money to people without producing more stuff - or even making it harder to produce the same - you MUST have inflation, rationing, or empty shelves - and often all three. Says who? Why can't the people producing stuff simply take lower profit margins instead?

bluGill 4y ago
That is the lower class producing stuff who you are asking to take lower profit margins.
- Drakim 4y ago
  There is a very strong disconnect between the value created by the lower class though their labor and what they are paid in wages. Companies don't use some formula where they give a percentage of what you create to you in return, they try to squeeze your wages down as low as possible. It doesn't matter if you produce 5000 bucks an hour or 100 bucks an hour in value for your company, they still want to pay you as little as possible. Stuff like staff loyalty and retention has been to a large part abandoned in favor of simply keeping wages down.
deleted 4y ago
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oatmeal1 4y ago
First, because margins are razor-thin as it is. Second, because it's a mature market and penetration pricing is not profitable.
solveit 4y ago
Prices lower than the market-clearing price necessarily mean rationing or empty shelves. If you have a hundred potatoes and two hundred people, lowering prices just mean some people won't be able to buy at the low price.
- deleted 4y ago
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- TheOtherHobbes 4y ago
  If you have a hundred potatoes increasing the prices means many people won't be able to afford them and those potatoes will be wasted. Increasing the cost of potato supply, with - for example - extortionate energy and fuel prices means the potatoes don't get grown in the first place. This is exactly what's been happening in the UK. Literally. Not I-read-this-in-an-econ-textbook hypothetically. But for real in the stores.
  - iamflimflam1 4y ago
    Exactly this - the current inflation is not demand driven. It is supply constraints that is causing it. This means that the normal way of controlling inflation (e.g. taking money away from people so they can't spend it) is not going to work. And in many ways is probably counter productive as it is making supplying goods more difficult.
Bloating 4y ago
For the same reason people claim to be underpaid. At some point, its not worth the investment.

bluGill 4y ago

That is the lower class producing stuff who you are asking to take lower profit margins.

Drakim 4y ago
There is a very strong disconnect between the value created by the lower class though their labor and what they are paid in wages. Companies don't use some formula where they give a percentage of what you create to you in return, they try to squeeze your wages down as low as possible. It doesn't matter if you produce 5000 bucks an hour or 100 bucks an hour in value for your company, they still want to pay you as little as possible. Stuff like staff loyalty and retention has been to a large part abandoned in favor of simply keeping wages down.

deleted 4y ago

[deleted]

oatmeal1 4y ago

First, because margins are razor-thin as it is. Second, because it's a mature market and penetration pricing is not profitable.

solveit 4y ago

Prices lower than the market-clearing price necessarily mean rationing or empty shelves. If you have a hundred potatoes and two hundred people, lowering prices just mean some people won't be able to buy at the low price.

deleted 4y ago
[deleted]
TheOtherHobbes 4y ago
If you have a hundred potatoes increasing the prices means many people won't be able to afford them and those potatoes will be wasted. Increasing the cost of potato supply, with - for example - extortionate energy and fuel prices means the potatoes don't get grown in the first place. This is exactly what's been happening in the UK. Literally. Not I-read-this-in-an-econ-textbook hypothetically. But for real in the stores.
- iamflimflam1 4y ago
  Exactly this - the current inflation is not demand driven. It is supply constraints that is causing it. This means that the normal way of controlling inflation (e.g. taking money away from people so they can't spend it) is not going to work. And in many ways is probably counter productive as it is making supplying goods more difficult.

Bloating 4y ago

For the same reason people claim to be underpaid. At some point, its not worth the investment.