4 ms·

I'm not disagreeing with the point you are making but I do find it would be helpful if people referenced actual examples of these things happening in real world

I'm not disagreeing with the point you are making but I do find it would be helpful if people referenced actual examples of these things happening in real world scenarios rather than thinking that a simple model is sufficient?

roenxi 3y ago
In my experience, which is not nothing, if you try that you'll end up in endless conversations where people go with some variant of "well it worked there, but it won't work here!". Economists have been idly trying to figure out a way to pitch the idea that wages are a price and therefore subject to supply and demand model for decades. No luck so far; it is difficult to get a man to understand something when that thing is his salary. Also, it is more interesting to try and find places where supply-demand doesn't work and then figure out why not. Usually the answer is regulation that creates shortages or overproduction. If you want a specific example; masks in COVID. There were price caps that guarantee we'll be caught short of masks the next time a respiratory crisis rolls around. It isn't like Bill Gates didn't see it coming, if there was money to be made he'd have a strategic mask reserve ready to go for the next one. But no. Price caps. There was even an article about a US mask producer who was refusing to expand production because he knew how it'd play out, unless my memory deceives me [0]. [0] EDIT Found the article - https://www.wired.com/story/surreal-frenzy-inside-us-biggest-mask-maker/ https://www.wired.com/story/surreal-frenzy-inside-us-biggest... . Bowen doesn't mention price caps, but you can see he is no stranger at all to how that sort of medical crisis plays out. He'd be the sort of person in a great place to make decisions about what sort of surge capacity to have on hand and how to plan for it and he is mainly responding to basic price signals. I still suspect that he'd be sensitive to the eminent domain risks under crisis conditions.

roenxi 3y ago

In my experience, which is not nothing, if you try that you'll end up in endless conversations where people go with some variant of "well it worked there, but it won't work here!". Economists have been idly trying to figure out a way to pitch the idea that wages are a price and therefore subject to supply and demand model for decades. No luck so far; it is difficult to get a man to understand something when that thing is his salary. Also, it is more interesting to try and find places where supply-demand doesn't work and then figure out why not. Usually the answer is regulation that creates shortages or overproduction. If you want a specific example; masks in COVID. There were price caps that guarantee we'll be caught short of masks the next time a respiratory crisis rolls around. It isn't like Bill Gates didn't see it coming, if there was money to be made he'd have a strategic mask reserve ready to go for the next one. But no. Price caps. There was even an article about a US mask producer who was refusing to expand production because he knew how it'd play out, unless my memory deceives me [0]. [0] EDIT Found the article - https://www.wired.com/story/surreal-frenzy-inside-us-biggest-mask-maker/ https://www.wired.com/story/surreal-frenzy-inside-us-biggest... . Bowen doesn't mention price caps, but you can see he is no stranger at all to how that sort of medical crisis plays out. He'd be the sort of person in a great place to make decisions about what sort of surge capacity to have on hand and how to plan for it and he is mainly responding to basic price signals. I still suspect that he'd be sensitive to the eminent domain risks under crisis conditions.