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I don't support those policies, but the US economy had its best ever during a period of price controls, etc. in the post-WWII era (edit: I mean, from then until

I don't support those policies, but the US economy had its best ever during a period of price controls, etc. in the post-WWII era (edit: I mean, from then until the late-1970s / early-1980s). The idea that it's anathema for the American people to take control of their economy, that they must be subject to a wealthy few and the 'free market' forces, seems odd, and a bit too convenient for the power, pocketbooks, and egos of wealthy few.

legitster 3y ago
Most of the price controls post-WWII were holdovers from the great depression - if anything, the post WWII boom was stimulated by the end of New Deal Price schemes. It's also important to note that a lot of the price controls of this era were minimum prices. You couldn't make or sell steel below a certain price, etc.
- wolverine876 3y ago
  I wasn't clear and I updated the GP: I meant the regulation, controls, etc. until the 1980s.
hackerlight 3y ago
Almost anything is better. Wealth tax, regulations, minimum wage, anti trust laws, land tax, whatever. Just don't do price controls unless you're correcting for market failure. They're objectively bad.
- wolverine876 3y ago
  Why do you think that? Give us reason to believe! Also, don't many of the solutions you name exist to 'correct for market failure'? Why are price controls different?
  - hackerlight 3y ago
    Because it means the market can't find equilibrium which leads to deadweight loss and problems like shortages. Allocation becomes inefficient and it's a matter of who can stand in line the longest to buy the bananas that are mispriced. Better to have correct prices so you don't get shortages, and rely on welfare or UBI to fill the same need. Minimum wage is a form of price control but it's one that's quite well studied empirically to have not super negative consequences as would be predicted by basic theory, perhaps because monopsony leads to mispricing of labor so minimum wage is fixing a market failure. Regarding wealth and land tax. Whatever your view on taxation it's a necessary evil so may as well pick the least bad taxes. Regulations can be a positive because they correct market failure. For example tragedy of the commons. Price controls that don't correct specific well defined market failure will add dead weight loss for no benefit. My view on this isn't fringe. It's mainstream among Keynesian economists that price controls are uniquely bad as a general rule.
klipt 3y ago
Aren't you missing the countless examples where price controls have led to shortages?
- wolverine876 3y ago
  The free market also leads to shortages - see the news about chips, housing, health care, education, etc etc etc. Don't compare a policy to the almighty, compare it to the alternative. The free market allocates resources to those who can pay the most for them. That's good for corporations using lithium, but not, for example, for sustenance, shelter, healthcare, or education. That said, I don't support price controls except for very specific situations. For example, when health or safety is threatened (lack of food, shelter, health care, for example) or to prevent extortion or exploitation.
  - gottorf 3y ago
    > except for very specific situations. For example, when health or safety is threatened (lack of food, shelter, health care, for example) or to prevent extortion or exploitation. Even when health or safety is threatened, price controls don't work; or more accurately, it works for some at the expense of others. "Anti-gouging" laws on gasoline or bottled water during natural disasters, for example, remove incentives for market participants to on one hand supply those critical goods when where they are most needed and on the other conserve those scarce goods[0], and result in fewer people getting what they need. Rent control and other forms of price controls on shelter have a long and deeply-documented history of having a lucky (or well-connected) few obtain housing, while others wait in line. It's further exacerbated by, again, the supply being disincentivized at the same time. In all cases, there's a highly-visible benefit for those who are able to obtain those goods and services at a price lower than the market-clearing price, contrasted to the invisible suffering of those who couldn't. After all, setting a price of something to a value does not magically produce enough supply to match demand at that price (and often times actually reduces the supply over time). As an analogue to the idea that some profit-seeking enterprises "privatize the profits, socialize the losses", policymakers in situations like this "publicize the benefits, hide away the costs" of such policies. > The free market allocates resources to those who can pay the most for them. An important clarification: the free market allocates resources to those who value those resources the most, expressed by the signal of price. Let's say a town is struck by a tornado and essential services are down, and there are 100 bottles of water, normally going for a dollar each. Let's assume that if the price is allowed to change, it'll go up to $10 per bottle. It's not like the rich man of town is going to buy up all 100 bottles at that highly inflated price; he'll buy one and take miserly sips, since he doesn't want to waste the most expensive bottle of water of his life. An 18-year-old who thinks he can get by for a day or two might not buy any bottles. A family with young children will be happy to spend the money for those extra bottles that just became available. In that way, the scarce resources are distributed along the lines of who value it the most. And the enterprising people of the next town over will brave the elements and the downed trees on the roads to deliver more water, hoping to make a profit. But if the price must remain at a dollar per bottle due to anti-gouging laws, there's less incentive for people to conserve their water, and more incentive for people to stock up "just in case". After all, bottles of water just became a lot more valuable than a dollar to everyone; it's perfectly rational for people to take advantage of that deal. And a lot fewer people from the next town would risk damage to their cars and themselves to meet this need. This isn't just a story; variants of this has occurred in the wake of natural disasters. [0]: https://www.cato.org/regulation/spring-2011/problem-price-gouging-laws#consequences-of-price-gouging-law https://www.cato.org/regulation/spring-2011/problem-price-go...

legitster 3y ago

Most of the price controls post-WWII were holdovers from the great depression - if anything, the post WWII boom was stimulated by the end of New Deal Price schemes. It's also important to note that a lot of the price controls of this era were minimum prices. You couldn't make or sell steel below a certain price, etc.

wolverine876 3y ago
I wasn't clear and I updated the GP: I meant the regulation, controls, etc. until the 1980s.

hackerlight 3y ago

Almost anything is better. Wealth tax, regulations, minimum wage, anti trust laws, land tax, whatever. Just don't do price controls unless you're correcting for market failure. They're objectively bad.

wolverine876 3y ago
Why do you think that? Give us reason to believe! Also, don't many of the solutions you name exist to 'correct for market failure'? Why are price controls different?
- hackerlight 3y ago
  Because it means the market can't find equilibrium which leads to deadweight loss and problems like shortages. Allocation becomes inefficient and it's a matter of who can stand in line the longest to buy the bananas that are mispriced. Better to have correct prices so you don't get shortages, and rely on welfare or UBI to fill the same need. Minimum wage is a form of price control but it's one that's quite well studied empirically to have not super negative consequences as would be predicted by basic theory, perhaps because monopsony leads to mispricing of labor so minimum wage is fixing a market failure. Regarding wealth and land tax. Whatever your view on taxation it's a necessary evil so may as well pick the least bad taxes. Regulations can be a positive because they correct market failure. For example tragedy of the commons. Price controls that don't correct specific well defined market failure will add dead weight loss for no benefit. My view on this isn't fringe. It's mainstream among Keynesian economists that price controls are uniquely bad as a general rule.

klipt 3y ago

Aren't you missing the countless examples where price controls have led to shortages?

wolverine876 3y ago
The free market also leads to shortages - see the news about chips, housing, health care, education, etc etc etc. Don't compare a policy to the almighty, compare it to the alternative. The free market allocates resources to those who can pay the most for them. That's good for corporations using lithium, but not, for example, for sustenance, shelter, healthcare, or education. That said, I don't support price controls except for very specific situations. For example, when health or safety is threatened (lack of food, shelter, health care, for example) or to prevent extortion or exploitation.
- gottorf 3y ago
  > except for very specific situations. For example, when health or safety is threatened (lack of food, shelter, health care, for example) or to prevent extortion or exploitation. Even when health or safety is threatened, price controls don't work; or more accurately, it works for some at the expense of others. "Anti-gouging" laws on gasoline or bottled water during natural disasters, for example, remove incentives for market participants to on one hand supply those critical goods when where they are most needed and on the other conserve those scarce goods[0], and result in fewer people getting what they need. Rent control and other forms of price controls on shelter have a long and deeply-documented history of having a lucky (or well-connected) few obtain housing, while others wait in line. It's further exacerbated by, again, the supply being disincentivized at the same time. In all cases, there's a highly-visible benefit for those who are able to obtain those goods and services at a price lower than the market-clearing price, contrasted to the invisible suffering of those who couldn't. After all, setting a price of something to a value does not magically produce enough supply to match demand at that price (and often times actually reduces the supply over time). As an analogue to the idea that some profit-seeking enterprises "privatize the profits, socialize the losses", policymakers in situations like this "publicize the benefits, hide away the costs" of such policies. > The free market allocates resources to those who can pay the most for them. An important clarification: the free market allocates resources to those who value those resources the most, expressed by the signal of price. Let's say a town is struck by a tornado and essential services are down, and there are 100 bottles of water, normally going for a dollar each. Let's assume that if the price is allowed to change, it'll go up to $10 per bottle. It's not like the rich man of town is going to buy up all 100 bottles at that highly inflated price; he'll buy one and take miserly sips, since he doesn't want to waste the most expensive bottle of water of his life. An 18-year-old who thinks he can get by for a day or two might not buy any bottles. A family with young children will be happy to spend the money for those extra bottles that just became available. In that way, the scarce resources are distributed along the lines of who value it the most. And the enterprising people of the next town over will brave the elements and the downed trees on the roads to deliver more water, hoping to make a profit. But if the price must remain at a dollar per bottle due to anti-gouging laws, there's less incentive for people to conserve their water, and more incentive for people to stock up "just in case". After all, bottles of water just became a lot more valuable than a dollar to everyone; it's perfectly rational for people to take advantage of that deal. And a lot fewer people from the next town would risk damage to their cars and themselves to meet this need. This isn't just a story; variants of this has occurred in the wake of natural disasters. [0]: https://www.cato.org/regulation/spring-2011/problem-price-gouging-laws#consequences-of-price-gouging-law https://www.cato.org/regulation/spring-2011/problem-price-go...