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> It doesn't if it's sitting there, with no one really occupying it, and priced out of the free market's reach It does. Reiterating: Supply and demand, not jus

> It doesn't if it's sitting there, with no one really occupying it, and priced out of the free market's reach It does. Reiterating: Supply and demand, not just supply. When someone builds a house and keeps it for themselves, occupied or not, that is "one less demand" for a different house. Not even banks want to own an infinite number of houses. > price is not really being determined by a competitive free market. What difference does that make? Supply and demand says nothing about competitive free markets. Hell, supply and demand is just as applicable to socialist command economies and everything else you can imagine. Supply and demand is even observable in animal populations. It is considered a law, and not in the legal sense, for good reason.

Rury 2y ago
> When someone builds a house and keeps it for themselves, occupied or not, that is "one less demand" for a different house. Not even banks want to own an infinite number of houses Not necessarily. Are you saying that if I demand to have $1 and keep it for myself, that is 1 less demand I have for different dollars? Seems to me I can still have demand for more dollars. In practice, there may be a point where I don't have demand for more dollars, but I don't see why demand could be unlimited. Are you implying prices have a theoretical maximum? Like $1000000000000000 and once that limit is reached, prices could never go above that? > What difference does that make? Supply and demand says nothing about competitive free markets. Hell, supply and demand is just as applicable to socialist command economies and everything else you can imagine. Supply and demand is even observable in animal populations. It is considered a law, and not in the legal sense, for good reason The difference matters when it comes to determining prices. Again, when it comes to prices, the law only holds true under certain conditions: competitive free market conditions. If the economic environment is not a free market, supply and demand are not influential factors when it comes to prices. We already discussed this above. In socialist economic systems, the government typically sets commodity prices regardless of the supply or demand conditions. In which case, if the price set by the socialist economic system (or monopoly) is higher than the price determined by what supply/demand for it really is, it is essentially being hoarded, and thus not for sale. I am definitely not wrong on this [1][2]. [1] - http://ingrimayne.com/econ/DemandSupply/SD_2.html#:~:text=Supply%20and%20demand%20analysis%20assumes,he%20does%20will%20influence%20price http://ingrimayne.com/econ/DemandSupply/SD_2.html#:~:text=Su.... [2] - https://www.investopedia.com/articles/economics/11/intro-supply-demand.asp https://www.investopedia.com/articles/economics/11/intro-sup...
- randomdata 2y ago
  > Seems to me I can still have demand for more dollars. Only to the maximum capacity of your ability to fulfill the wishes of other people. A dollar is, after all, an IOU. For someone to willingly give you an IOU, you have to give them something first. While a single dollar may not satisfy you, there is an eventual limit to how much you can meaningfully give. Of course, as IOUs can be traded, the value is also subject to the properties of supply and demand. > The difference matters when it comes to determining prices. That's fine. The law of supply and demand isn't some kind of enacting force. It is not a law in the legal sense, if that is where you confusion lies? It is an observational law. The observation does not concern itself with the exact mechanics of how the price is determined, it merely notices the relationship of price as a function of supply and demand. > the government typically sets commodity prices regardless of the supply or demand conditions. And you will notice that the law of supply and demand still holds.
  - Rury 2y ago
    > For someone to willingly give you an IOU, you have to give them something first Not necessarily, someone can just hand me a dollar for nothing in return. > While a single dollar may not satisfy you, there is an eventual limit to how much you can meaningfully give Agreed, that limit is what total supply is. > It is an observational law... it merely notices the relationship between price as a function of supply and demand Agreed. > But you will notice that the law of supply and demand still holds. This idea that supply and demand only applies in a competitive free market is completely unfounded Yes, it still holds from the perspective of what's actually being traded. But notice it's possible to withhold something from being traded. The stuff withheld is not priced according to the law. However, the price of stuff which is still being traded, still is.
    - randomdata 2y ago
      > Not necessarily, someone can just hand me a dollar for nothing in return. Value is certainly subjective. While it is possible you might find someone seeing a dollar as being worthless, just as they might give you a house for nothing in return, I don't expect you will find that to be scalable. If you have a thirst for all the dollars you can get your hands on, you are bound to go thirsty relying on this. > Agreed, that limit is what total supply is. There is a limit on supply, but also a limit on demand. That's why we call it "supply and demand", not just "supply". In a "normally functioning" market, demand actors start to drop out of the market as price rises. In fact, you can see this happening in the housing market. A lot of people can't afford a house, so they are no longer participants in the housing market. They may still wish to own a house, but that's not demand, that's dreaming (or what you might call latent demand). Hence why a shortage occurs when price is unable to rise. When price is unable to rise, there is no price-based mechanism to see that people leave the market, creating a situation where "demand exceeds supply". Which is why you will typically see alternate mechanisms step in instead, such as a lottery, or offering on the basis of first-come, first-served, to force people out some other way. A medical doctor with an ethical, and often legal, obligation to not allow price to rise is apt to use a needs-based mechanism, serving the patients in most need of care ahead of the richest patients with the common cold. That's certainly not the case in the housing market, though. Price is most definitely able to rise – demonstrably so. > But notice it's possible to withhold something from being traded. Of course – at which point it ceases to be supply. Just like, as above, it is possible to withhold on the other side of the transaction, at which point that ceases to be demand. This is exactly what the law of supply and demand describes.

Rury 2y ago

> When someone builds a house and keeps it for themselves, occupied or not, that is "one less demand" for a different house. Not even banks want to own an infinite number of houses Not necessarily. Are you saying that if I demand to have $1 and keep it for myself, that is 1 less demand I have for different dollars? Seems to me I can still have demand for more dollars. In practice, there may be a point where I don't have demand for more dollars, but I don't see why demand could be unlimited. Are you implying prices have a theoretical maximum? Like $1000000000000000 and once that limit is reached, prices could never go above that? > What difference does that make? Supply and demand says nothing about competitive free markets. Hell, supply and demand is just as applicable to socialist command economies and everything else you can imagine. Supply and demand is even observable in animal populations. It is considered a law, and not in the legal sense, for good reason The difference matters when it comes to determining prices. Again, when it comes to prices, the law only holds true under certain conditions: competitive free market conditions. If the economic environment is not a free market, supply and demand are not influential factors when it comes to prices. We already discussed this above. In socialist economic systems, the government typically sets commodity prices regardless of the supply or demand conditions. In which case, if the price set by the socialist economic system (or monopoly) is higher than the price determined by what supply/demand for it really is, it is essentially being hoarded, and thus not for sale. I am definitely not wrong on this [1][2]. [1] - http://ingrimayne.com/econ/DemandSupply/SD_2.html#:~:text=Supply%20and%20demand%20analysis%20assumes,he%20does%20will%20influence%20price http://ingrimayne.com/econ/DemandSupply/SD_2.html#:~:text=Su.... [2] - https://www.investopedia.com/articles/economics/11/intro-supply-demand.asp https://www.investopedia.com/articles/economics/11/intro-sup...

randomdata 2y ago
> Seems to me I can still have demand for more dollars. Only to the maximum capacity of your ability to fulfill the wishes of other people. A dollar is, after all, an IOU. For someone to willingly give you an IOU, you have to give them something first. While a single dollar may not satisfy you, there is an eventual limit to how much you can meaningfully give. Of course, as IOUs can be traded, the value is also subject to the properties of supply and demand. > The difference matters when it comes to determining prices. That's fine. The law of supply and demand isn't some kind of enacting force. It is not a law in the legal sense, if that is where you confusion lies? It is an observational law. The observation does not concern itself with the exact mechanics of how the price is determined, it merely notices the relationship of price as a function of supply and demand. > the government typically sets commodity prices regardless of the supply or demand conditions. And you will notice that the law of supply and demand still holds.
- Rury 2y ago
  > For someone to willingly give you an IOU, you have to give them something first Not necessarily, someone can just hand me a dollar for nothing in return. > While a single dollar may not satisfy you, there is an eventual limit to how much you can meaningfully give Agreed, that limit is what total supply is. > It is an observational law... it merely notices the relationship between price as a function of supply and demand Agreed. > But you will notice that the law of supply and demand still holds. This idea that supply and demand only applies in a competitive free market is completely unfounded Yes, it still holds from the perspective of what's actually being traded. But notice it's possible to withhold something from being traded. The stuff withheld is not priced according to the law. However, the price of stuff which is still being traded, still is.
  - randomdata 2y ago
    > Not necessarily, someone can just hand me a dollar for nothing in return. Value is certainly subjective. While it is possible you might find someone seeing a dollar as being worthless, just as they might give you a house for nothing in return, I don't expect you will find that to be scalable. If you have a thirst for all the dollars you can get your hands on, you are bound to go thirsty relying on this. > Agreed, that limit is what total supply is. There is a limit on supply, but also a limit on demand. That's why we call it "supply and demand", not just "supply". In a "normally functioning" market, demand actors start to drop out of the market as price rises. In fact, you can see this happening in the housing market. A lot of people can't afford a house, so they are no longer participants in the housing market. They may still wish to own a house, but that's not demand, that's dreaming (or what you might call latent demand). Hence why a shortage occurs when price is unable to rise. When price is unable to rise, there is no price-based mechanism to see that people leave the market, creating a situation where "demand exceeds supply". Which is why you will typically see alternate mechanisms step in instead, such as a lottery, or offering on the basis of first-come, first-served, to force people out some other way. A medical doctor with an ethical, and often legal, obligation to not allow price to rise is apt to use a needs-based mechanism, serving the patients in most need of care ahead of the richest patients with the common cold. That's certainly not the case in the housing market, though. Price is most definitely able to rise – demonstrably so. > But notice it's possible to withhold something from being traded. Of course – at which point it ceases to be supply. Just like, as above, it is possible to withhold on the other side of the transaction, at which point that ceases to be demand. This is exactly what the law of supply and demand describes.