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> Directly controlling price will always lead to corruption and inefficiencies. So does allowing monopolies or oligopolies to abuse their position. I mean obvi

by qwytw 3y ago

> Directly controlling price will always lead to corruption and inefficiencies. So does allowing monopolies or oligopolies to abuse their position. I mean obviously price controls are not the perfect solution and should only be the last resort but I don't see how forcing a monopoly to share some it's surplus with consumers could have a negative outcome if the price cap is set at such a level that it would not affect actual supply. > And as you mention, the problem is monopoly and oligopoly, which is insufficient supply of sellers. In certain markets that's unavoidable. Should we have multiple competing power grids, train/metro tracks, water supply or sewage networks etc? Probably not since that would be very inefficient. In these situations the only reasonable option is price controls (without or without subsides) and I can't think of any other solution.

lotsofpulp 3y ago
Yes, infrastructure where only one provider exists means society should just run it themselves like a utility. We already do this in many or most places. The military, electricity, gas, water, roads, public transit are all “sold” (or operated at cost) by the government.
AnthonyMouse 3y ago
> In these situations the only reasonable option is price controls (without or without subsides) and I can't think of any other solution. You still don't need price controls. Suppose you have a subway system. The monopoly isn't on the cars; you could have multiple operators using the same tracks. The monopoly is on the tracks. Alright, so the tracks can be publicly owned. They don't have to be publicly operated. They can work like this. Construction and maintaining the tracks is put out to competitive bidding. Competing train operators then bid for timeslots to use the tracks. If a line doesn't receive enough bids to pay for its maintenance, it gets shut down. If operators place bids for operating a new line (with e.g. a 10-year contract) that exceed the lowest bid received to construct it, it gets built. The government isn't actually operating anything or setting any prices. All they do is retain ownership of the tracks and put out the provision of services to competitive bidding, so you don't need any price controls.
- qwytw 3y ago
  > They can work like this Yeah they can. I mean sometimes the model you're suggesting works out great. Sometime it doesen't. > The government isn't actually operating anything or setting any prices Which is not necessarily a good thing if your goal is to increase the numbers of passengers by making mass transports more attractive than other options instead of maximizing it's potential profits. And there are other examples were pretty controls are clearly in the societies interest. Let's look at what happened with energy prices in Europe last summer. A spike in fossil fuel costs caused the price of electricity to go up by up to 10x. Producers using hydro, renewables, nuclear even coal had massive surpluses. I can't think of any reasons against price controls in situations such as that. As a result such markets (.e.g stationary PC market) tend to stagnate.

by qwytw 3y ago

lotsofpulp 3y ago

Yes, infrastructure where only one provider exists means society should just run it themselves like a utility. We already do this in many or most places. The military, electricity, gas, water, roads, public transit are all “sold” (or operated at cost) by the government.

AnthonyMouse 3y ago

> In these situations the only reasonable option is price controls (without or without subsides) and I can't think of any other solution. You still don't need price controls. Suppose you have a subway system. The monopoly isn't on the cars; you could have multiple operators using the same tracks. The monopoly is on the tracks. Alright, so the tracks can be publicly owned. They don't have to be publicly operated. They can work like this. Construction and maintaining the tracks is put out to competitive bidding. Competing train operators then bid for timeslots to use the tracks. If a line doesn't receive enough bids to pay for its maintenance, it gets shut down. If operators place bids for operating a new line (with e.g. a 10-year contract) that exceed the lowest bid received to construct it, it gets built. The government isn't actually operating anything or setting any prices. All they do is retain ownership of the tracks and put out the provision of services to competitive bidding, so you don't need any price controls.

qwytw 3y ago
> They can work like this Yeah they can. I mean sometimes the model you're suggesting works out great. Sometime it doesen't. > The government isn't actually operating anything or setting any prices Which is not necessarily a good thing if your goal is to increase the numbers of passengers by making mass transports more attractive than other options instead of maximizing it's potential profits. And there are other examples were pretty controls are clearly in the societies interest. Let's look at what happened with energy prices in Europe last summer. A spike in fossil fuel costs caused the price of electricity to go up by up to 10x. Producers using hydro, renewables, nuclear even coal had massive surpluses. I can't think of any reasons against price controls in situations such as that. As a result such markets (.e.g stationary PC market) tend to stagnate.