3 ms·
It's worth researching the inevitable consequences of price controls, it's a predictable outcome that's been tested many times. Price controls are Hobson's cho
by claytongulick 2y ago
It's worth researching the inevitable consequences of price controls, it's a predictable outcome that's been tested many times.
Price controls are Hobson's choice: Would you prefer expensive bread, or no bread?
- ElevenLathe 2y agoThat's right, which is why basic healthcare (including production of normal, well-characterized, non-experimental drugs) should be taken out of the price system altogether and run directly by the government.
- AnthonyMouse 2y agoNormal off-patent drugs are already pretty cheap. You can get a bottle of ibuprofen for like $5. Drugs still under patent are, of course, expensive on purpose.
- BobaFloutist 2y agoBy price controls I literally just mean "anti-gouging regulation", not "you can't charge more than exactly $5 for x"
- AnthonyMouse 2y agoDescribe the operation of "anti-gouging regulation" that isn't just a price ceiling or a cap on how much the price can increase in response to a sudden supply constraint that would otherwise result in a shortage.
- AlexandrB 2y agoUsing the free market to respond to a shortage requires competition. Patents can make this impossible. When you have a fixed supply of something and no other entity can produce it having an uncapped price doesn't really help the market respond. Consider the example of a Taylor Swift concert. Are scalpers creating more supply by raising the prices of tickets or is it pure rent seeking? And, to many, the difference between "expensive bread" and "no bread" in the case of drugs is entirely academic.
- AnthonyMouse 2y agoProducts under patent would already be charging the monopoly price regardless of a shortage. That's what a patent is supposed to do -- cause prices for new drugs to be temporarily high to provide the incentive to develop new drugs. The limit for this is how much better the new thing is than the old thing, such that if you charge more than that people switch back to the old thing. This obviously kind of sucks when the drug is the difference between life and death, but those are also the drugs we most want a large incentive to develop, and that's why the patents eventually expire. > Consider the example of a Taylor Swift concert. Are scalpers creating more supply by raising the prices of tickets or is it pure rent seeking? Scalpers are trading time for money. You want tickets that would otherwise sell out but you don't want to wait in line, so you pay someone to wait in line for you. It causes tickets to be available at the higher price instead of being sold out and unavailable at any price. The way to prevent the rent seeking is to auction off the tickets to begin with so the money goes to the artist instead of the scalpers.
- Ray20 2y agoDefine gouging.
- michaelje 2y agoEvery other country appears to have the “bread” at a reasonable price. Ironically, it’s the US which has the same bread for 100x the cost.
- dgfitz 2y agoDid you know Russian citizens spend half their take home pay on food? Wanna keep running with that point of yours?
- sqeaky 2y agoI thought we were talking about developed nations participating in the global economy.
- michaelmrose 2y agoThere are other markets than Russia and the US what about all of Europe.
- dgfitz 2y agohttps://www.bbc.com/news/articles/c99vz4kz5vzo https://www.bbc.com/news/articles/c99vz4kz5vzo