man up and espouse the whole thing rather than claim that magic fairies prevent anybody from really starving or suffering when shortages occur.
- gov't creates scarcity by preventing savings and investments and by promoting consumption rather than production via the tax code, which is done to prop up gov't thirst for free money, as it steps in and counterfeits currency.
Droughts and all that nonsense happens everywhere and it's already discounted for in the price. Non-market economies just don't have the proper discounting mechanisms, they don't have any real price discovery and they break the feedback signals that are telling the producers how much and of what should be created.
Look, when a shortage occurs, higher prices mean that in the long term, there will be more entrants to provide that service. Moreover, in the short term, prices going up does encourage efficient allocation of resources, as only those who value the resources will take them at the higher price.
- yes, I said this in multiple comments here, I don't see where the argument is.
"But wait," I hear you cry, "I value those drives (or that food), I just don't have the money!"
- nope. That would be me saying it, it's the majority of those who respond to my comments are promoting that view.
Are you sure you are trying to reply to my comments and not somebody else?
No, it's "market" in action, but not "free market" in action: they are *absolutely* not the same.
- again, unless gov't comes in and starts coming up with regulations on who can get the drives, what the prices are, etc.etc., then it's free market for this specific instance. Free market is literally market free of gov't regulations.
Most of the high-tech industry in SE Asia is supported by the government
- I don't know all the details of how every single factory operates in Asia, but I am pretty sure that they don't need gov't to help them at all, as they are the only actual manufacturers (as this story proves). Subsidizing something like that makes no sense. However that's NOT what I am talking about, I am talking about gov't coming in with regulations on how to distribute the hard drives and forcing the stores to behave in some unproductive and inefficient manner, creating space for corruption and distorting the market.
I am wasting my time on you, it's really a waste of time.
As to sellers turning 'non-profit'... it's you, who is building a straw-man, but also you are basically coming up with nonsense. Stores that set artificial rationing limits (1-2 drives per customers, all that), are either doing it to create more panic or they are not pricing the drives high enough.
OWS is protesting the wrong people and most of the protesters are doing it because they don't have a clue what's good for them. They are protesting 'capitalism', while actually protesting fascism/corporatism, where gov't and some corporations merge in a monopolistic orgasm.
Incorrect. It means that those who truly need the resource and who have the money to pay inflated prices will get the resource. Where it is "most needed" is irrelevant, and may well not be the most efficient. Welcome to one of the great lies about capitalism--that it is somehow naturally and magically "efficient". Nice try, though. I was wondering how long it would take for the propaganda machine to start up.
- that is a bunch of nonsense.
MANY people have enough resources to buy those drives at higher prices (not inflated - HIGHER). People who have those resources are not all buying those drives, because there are fewer people who need those drives than people who have resources to buy them.
So yes, the drives are going to those people who have the resources AND who have the need.
Your objection is that you believe you need that drive more than some guy with more resources? OK, if you truly think so - take a loan and buy that drive! If you have a BUSINESS case that you will produce something by buying that drives that will offset the cost of loan and will make you profit on that transaction, then you have a legitimate case that you need that drive, you can convince somebody that your plan will work, you'll get your loan and you'll get your drive.
You don't actually understand that, so whatever. You think you have more authority to say that you need that drive more than somebody with greater resources based on some idea of what 'fair' is. Well you do not. If you are unwilling to do all that work, it means you have just proven that you don't need that drive as much as the other guy.
Yes, this means the market is working fine at finding the efficiencies. The drive is more useful in the hands of somebody who is going to use it for production rather than consumption, because production is what economy is about, consumption is just a trivial consequence of production. The fact is - unless you are going to produce something with that drive rather than simply consume it, like a guy with more resources than you, then the fair and moral and correct and efficient thing to do is to sell the drive to the guy who can afford the higher premium.
--- As to Dell, HP, etc. The precise details are IRRELEVANT. The market is a discounting mechanism and it has to find the proper balance between supply and demand and price ratio. You can't understand it, because you grew up in a broken system, that doesn't want you to understand it.
Wait, so are you saying that a richer person who doesn't really NEED the drives will be buying them from under your nose as opposed to a richer person who needs the drives?
If somebody doesn't need the drive and they are richer than you are, they may still wait for prices to come down, otherwise they are wasting money.
If somebody is richer than you and they need the drive, they'll pay the premium for it and that's the correct way to do more efficient distribution. There are maybe 10 million people who want to buy the drives at their past prices, but the market figures that the supply will be limited to maybe 2 million drives. Now the stores have a dilemma - sell the drives now cheap, and be left without stock and still have to pay the rent and salaries, utilities, etc. Of raise the prices where the demand is cut by 80%, but allow the few drives that are in the store to cover the cost of the emptier stores standing there.
It's not about your moral indignation that you can't afford as much as another guy. It's about market finding its efficiencies, people who need the drives and have more resources than you affording them and stores still staying open and creating a signal to the manufacturers that there is a need for the drives even at those higher prices, so that more production is signaled to come on line.
You want artificial regulations to give you something you basically can't afford, well, that's how gov'ts destroy economies.
As to your line on
In a perfect Communism where all money is distributed equally then of course your theory would work, but that is a 100% different environment then basically the entire world.
- OH MY GOD. Is that what I am talking to here? Perfect Communism is when all money is distributed equally?
Are all those people PRODUCING equally? Because it seems to me you like nobody else to have more than you, but are you willing to work as much as everybody out there? Because I ensure you, you are NOT working as hard as most people who run their own businesses.
"perfect communism"... "money distributed equally"..... I hate this world.
I tell you what, you bet your lambda against my understanding of how politicians sell power and I'll take that bet. The point is not to look at some silly function, the point is that regulations never work as you think they should. Regulations create gray/black markets, create under the table dealings (corruption) and that's what I meant by 'ticket scouts'. What do you think your regulations do, when they limit the access artificially without raising prices where supply demand are balanced? Your gov't regulations always lead to less efficiency and more corruption, with politicians being the power brokers, selling power for money.
If steak is the only, or cheapest, food source, then you *do* have a moral right to the steak.* You just don't have the resources to afford it.
- if the stake is the cheapest thing around and people still end up buying it, then it's the correct pricing.
This is, in simplest terms, survival of the fittest then. If there are very limited resources, they HAVE to be rationed one way or another, and the market is the best rationing/price discounting mechanism. If you can't afford that stake BUT the stake still sells, then it's your problem to find a cheaper source of food or to rely on charity.
Of-course you can always come with: I will use force, well, that's also a market at work. Maybe you will use force, but who is to say that you'll win? Somebody with more resources to buy food may also have better protection.
As to morality - what is so moral about denying somebody WITH resources, somebody who CAN pay for the resources, while giving it to somebody who cannot afford it? I say it's immoral.
Saying: "everybody has a moral right to that stake" is fine, but it misses the point.
There is so LITTLE stake, that the prices could be set high enough to allocate that stake only to those, who can truly afford it. But this is the most moral outcome in the world!
If you are the ONLY person who can't afford the stake, you'll be taken care of by a charitable person.
If the majority of people can't afford the stake, it means the production of stakes is FUCKED UP. Exactly like the case today. Then you should ask the question: how come the PRODUCTION is so out of whack that most people can't afford that stake? If you are not completely brain dead, you'll realize that producers want the biggest market, but the thing that stands between them and production is artificial barriers (unless the earth is decimated by a meteorite or some such insane event.)
No, there is no such thing as gouging. If the seller's prices are too high, nobody will buy, and if they are too low, he will be making a loss, as he gets out of stock quickly, secondary markets form, and he is left with an empty store to pay for.
Price gouging is not an economic concept, it's a social construct, it's when people think the prices are too high, they don't like it.
Well, if they believe this is gouging and that prices really shouldn't be so high, they shouldn't buy and the prices will come down. If they are wrong, and there is real shortage, then they come around and buy and likely prices will go up again if shortage lasts.
Market is a price discounting mechanism, and you clearly don't have enough knowledge about it if you miss such an important point.
Price gouging is from point of view of those, who can't afford the prices, but it doesn't mean ANYTHING if the drives are still sold, if there is a market for them at those higher prices.
As to somebody losing a business over this - people are irrational, things happen.
You left out the other quaint aspects of the 19th century like child labor,
- of 19th century? Child labor existed always. 19 century brought it to cities, but it didn't create child labor. What do you think people did with children in 18th century, cuddled them with candy?
In FACT, 19 century free market capitalism made the people so productive, and started requiring so much specialization, that children: 1. Didn't have to be in the work force again, because their parents became wealthy enough through their productivity (land/capital applied to their labor) to be able to feed their children without sending them to work earlier. 2. Made the children a poor choice of worker, as more specialization required more knowledge, so 19 century actually pushed the children into more education, not more labor.
Gov't regulations don't stop child labor. Look at all the countries where there are regulations against it, but child labor still exists there. It's because it's POVERTY that drives child labor, not lack of gov't regulations.
Free market capitalism makes people productive and wealthy and that's what stops child labor (and slavery by the way, it's much more efficient to hire workers for pay than to own and take care of slaves, and free men work better.)
families rendered destitute when the breadwinner was hurt or killed in an unsafe workplace
- can't make on omelet without braking eggs. However the increase of wealth in that century allowed private charities to take care of those, who were truly in trouble. Gov't enforcing 'charity' is only stealing money and making people resentful of any real charity.
18/7 work just to make ends meet,
- can't make an omelet without breaking some eggs. UNTIL there is enough wealth in the system, everybody has to work more. Over 19 century the productivity grew so much, that people were achieving much more with much less work, and the century ended with a MUCH shorter work day. Henry Ford instituted 5 day 8 hour work day, paying 2 times as much as anybody else, $5/day, which was equivalent of 1.25 ounces of gold in a week, or over $2000 in current money per week (and that was WITHOUT INCOME TAXES). So in reality it's more like $3000 week, and eve that is not true, because the costs of living have risen so much thanks to gov't money counterfeiting.
Ford did it without unions but because of MARKET regulations - too much turn over in his labor intensive assembly lines. He even hired cripples, that nobody else wanted to hire, because his assembly line efficiencies allowed it to him.
He made people so productive, that with 8 hour days, with only working 5 days a week, his factory doubled production of cars after this, and the people were paid enough to maintain a family with a stay at home wife, 5-6 kids, pay for everything out of pocket and being paid enough to be able to buy a Ford car with 4 months of pay.
Great deals of deregulation do typically lead to a boom, followed shortly by a crash.
- ha ha ha ha, no great deals of REAL deregulations you haven't actually tried. Just removing partial regulations, while leaving the rest there, creates more imbalance that leads to more abuse. You are talking about Glass Steagal, but you are missing the important part of regulation that wasn't removed with it, what it was counteracting - FDIC and fake money.
The intrinsic problem with a completely free economy is that wealth attracts wealth and poverty attracts poverty
- no, that's intrinsic problem with command economies or with fascist economies.
Free market economies actually elevate everybody's standard of living, provide more new products, force prices to drop and create more leisure, that's what USA had in 19 century and beginning of 20th - almost completely free market.
There was nothing remotely free about the crony capitalism and skewed legal decisions of the 19th
- you don't know the definition of the free market, and 19th century saw a very small gov't, the regulations were almost non-existent and gov't was tiny. The gov't grew over 20th century past 1913, as the Fed was created and income taxes introduced, which allowed the gov't to cut into income and not into consumption via excise taxes, so gov't grew and regulations grew with it, because every new gov't dep't is there to do more regulations.
Free market is market free of gov't regulations, so you don't understand that. Of-course whatever amount of gov't that existed in 19 century was also corrupt, but the gov't was TINY, that's the point. It couldn't possibly regulate as much and be as corrupt as it became once gov't broke the barrier of growth and started counterfeiting money, monetizing its debt and cutting into income/savings/investment of the economy, not into consumption.
Over 19th century USA experienced massive economic GROWTH, unemployment was nearly non-existent and dollar strengthened by a factor of 2 over that time period, all while the wealth was increasing due to all the new businesses.
The gov't was dealing with the largest businesses, such as railroads and steel producers, but the rest of the market was basically free to do what it does best - find efficiencies without restraint, bring more new products to the markets and lower prices via competition.
China today sees real economic growth because it's so easy to start and have a business there, which is a DE-FACTO situation right now. You maybe should pay attention to all of the manufacturing being outsorced to China. That's not because companies love outsourcing, it's because they can only compete and stay in business by outsourcing, because regulations in the rest of the world are numerous and expensive and monopolies are the preferred way of doing business for gov't.
They aren't trying to make sure everyone gets a drive.
- right, that's NOT what I am saying.
I am not saying that a store owner is interested in some form of 'fair' distribution. I am saying that price discovery mechanism built is the principle, which will sort out the ordering of things, and it will figure out who is willing to pay how much for the drive, which allows those, who really need the drives to have access to them by cutting off those, who don't really need the drives bad enough to pay the premium.
This is not about some conscious decision on the part of store owner to makes sure 'everyone gets a drive' - this is not even possible with a shortage of drives. This is about store owner minimizing his losses and maximizing his gains, and the market acts as a discounting mechanism, which means the market ANTICIPATES a drive shortage and spikes the prices trying to find the balance, where people are still buying, so drives are still moving but the stock isn't emptied all at once by some third party, who wants to make the market by opening a secondary market (buying drives low from the store and selling high on the corner.)
My point earlier was that artificial scarcity added to the price hike only indicates that the store owner didn't discount the potential shortage enough, didn't raise the prices high enough to prevent a run on drives, so he is engaging in a worthless activity of trying to limit number of drives sold per person (maybe the store owner has different information than the buyers, so he actually wants to get rid of stock, and the limit thing is just to force the market into a more panic mode, but it's not a useful behavior for one store owner to engage into, it's better to raise the prices more).
As to 'goodwill' and all that, it's pure nonsense. Boycotting a store owner because he had higher prices for drives when there was a shortage (perceived or real) never works.
1. What are you talking about, there is nothing it the story that says they are making as much profit as they can.
2. You are using the word 'gouging' here and in other comments, because you don't understand basic economics. You think gouging is charging more than you like, especially after the store owner already bought the item out, which is pure nonsense. Store owner may buy the item, maybe he bought it on credit or debit, maybe he has a pay day DELAY even, maybe he is only paying for it after he sells it, there are all these possibilities, which you don't know. But it doesn't matter! Anybody can charge ANYTHING for ANY item, and 'gouging' is just a bullshit term because you can't have it because you are unwilling to pay what is being charged.
No, unregulated economy produces an actual economic boom, the way USA saw in 19 century. Then gov't becomes big enough to take over the nation because the private businesses created so much wealth, that gov't taxes were enough to buy too many favors, then the system is corrupted by politicians gaining power over markets and businesses, giving themselves power to regulate and tax income and counterfeit currency.
That's the beginning of the end of the economy and the end is not pretty, the end is where the poor truly starve as opposed to being gainfully employed, as most of the people are in growing economies that are free of gov't regulations and where prices actually go down and money gets more and more purchasing power. Of-course somewhere in between there the gov't gets so much power, that it regulates everything into oblivion, including any real economic activity and it also changes the education system eventually to make sure that the people lose any understanding of what real economies are about. Gov't makes sure that people cheer for more gov't, even though it's gov't that destroys the economy.
that's not in the story and obviously it's not true. What is more likely to be true is that they discover that their stock is emptied quickly, but that's just because somebody is buying all of it to resell at a more efficient (read higher) price at the corner, the way ticket scouts do.
As to rationing - whatever their believes are, they are wrong. This doesn't work and it only can lead to some corruption (well, I don't know if this case is big enough for that, but in principle). It can lead to corruption, same type of corruption you observe with ticket scouts, who are the only ones that the tickets will be sold to in many cases, because they know the sellers at the theaters and prices are artificially lowered by gov't regulations, thus inefficiency created where true efficiency could easily be found by just raising the prices and allowing price discrimination at the theater cash register, which would put scouts out of business, by the way.
you are observing free market in action with the HDDs here being priced higher than previously. If no gov't steps in and starts distorting the market with regulations on who may sell HDDs to whom and at what price and what the rules are, etc., then you are observing the market as it is supposed to function.
As to entire nations running free market economies - USA 19 century basically, and China today basically. They are as free market economies as we have observed in the last 200 years.
We also have pretty good references to very non-free market economies, command economies and how 'well' they do, also in the same time frame.
A funny song, but unless you are part of the government, I don't see why you'd want to run wars as your business. If you are not a gov't (or a gov't promoted weapons monopoly) wars are not really profitable.
Killing valuable resources is stupid (and people are also resources, they make stuff that others want.) The point is that you completely misunderstand what economy is. Economy is production and we want as many people producing as possible, so killing potential producers is really dumb. You have been trained to believe that economy is about consumption. Well, why don't the Fed just print a trillion trillion trillion dollars then and let you consume everything, see how that works out for you.
To make a simple point: a person can only pay so much for disk drive, but a company can pay more. However a person is maybe willing to wait to see the prices come down (people wait all the time when new tech comes out for example, and the first ones to buy are normally 'rich' or companies).
However a company may need the disk to be PRODUCTIVE. In reality the 'rich' are most likely to be more productive with the goods than just those, who buy to CONSUME, because those who are 'rich' (as I said, companies often are richer than single individuals), are willing to pay the premium because it's important for their business.
Any productive business is more important than any consumer for the economy. Of-course in most of the western world (including USA), people lost understanding that it's production that drives the economy, not consumption. It's businesses that create jobs and it's businesses that pay salaries and build products.
-- Of-course it can be just a richer individual than you (there is always somebody richer than you, unless you are maybe Warren Buffet or Gates or Putin and such), so obviously if the product is SO SCARCE that the prices has to go up to the levels where only the richest people can buy and they are willing, this is STILL finding efficiency for the seller!
They are not in business of charity, those stores as I understand, right? They are making a profit and if what they are selling SELLS at much higher prices, they should definitely sell at those prices.
Do you know what happens when there is inefficiency in the market and a store doesn't sell at the most efficient price, say it sells much lower than the price should be?
Secondary markets - that's where somebody buys and resells the stuff for profit. They are right to do so too, by the way, never mind how objectionable you may find the practice.
This is what price discovery is about. If the prices are too high and there are no takers, then the prices will go down. What do you think stores do all the time with prices? They are moving them up and down all the time. I build and sell software that helps the store chains and suppliers to do this - search for most efficiency via price discovery and by comparing product categories/brands/subbrands/suppliers/manufacturers/seasons/colors, etc. The prices always move as stores are searching for more efficiency and profit.
If the prices are too high, then there is something wrong as well, but if the prices are too low, then it's also a problem - the stores are then not doing their job.
You have just given an example that I will use to explain to you where your logic is flawed - if the stake is too expensive, then it means you cannot have it because the market efficiency was found.
If you have little money, it means you can't buy something that is too expensive for you, but this doesn't mean the market doesn't work! It works perfectly fine here as well. If stakes are bid on and there are only enough stakes and enough bidders so that the price is found at $5 for the stake, this means that the stake is sold at the most efficient price.
You shouldn't be trying to buy the stake then. If you are hungry and have $1 only and this stake is $5, it doesn't mean that you have a 'moral' right to that stake. This means that whoever paid $5 needs that stake AND can afford that stake.
OBVIOUSLY if the stake that somebody is willing to pay $5 for was sold at $1, that would be inefficient, and now you can turn around and make a profit. Sell that stake at $5 and put $4 into your pocket.
What you should do with that $1 is go to McDonalds and get something else to eat that they sell efficiently at those prices.
You should go back to this thread and read from the top. I address this - this is NOT a good idea and it doesn't work, because it immediately creates a secondary market, which will discover the price more perfectly (read - it will raise the price further to gain more efficient distribution).
You can re-enter the store, you can enter multiple stores, you can ask others to buy the drives for you, etc. The correct behavior is to raise the prices enough, so that only those who really need them buy them, but if the prices become too high, so that nobody buys, then you lower them a little and see what happens. That's basic market price discovery and it allows to queue up the resources for most efficient consumption, because some people can wait until the prices fall down, but some people need their drives, and if the prices stay low, they will NOT get their drives, because others will just buy them (and may resell them too.)
As to regulations - only market regulations are real and work, I am not sure what you mean by regulations your sense though, I'll leave at the fact that market IS regulating - the prices are higher and there is scarcity, but market will regulate further, and if prices are not high enough for most efficient distribution, there will be secondary markets. Somebody will buy those drives just to resell them at higher prices, which is really a good thing - this is what maximizes market efficiency.
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man up and espouse the whole thing rather than claim that magic fairies prevent anybody from really starving or suffering when shortages occur.
- gov't creates scarcity by preventing savings and investments and by promoting consumption rather than production via the tax code, which is done to prop up gov't thirst for free money, as it steps in and counterfeits currency.
Droughts and all that nonsense happens everywhere and it's already discounted for in the price. Non-market economies just don't have the proper discounting mechanisms, they don't have any real price discovery and they break the feedback signals that are telling the producers how much and of what should be created.
Look, when a shortage occurs, higher prices mean that in the long term, there will be more entrants to provide that service. Moreover, in the short term, prices going up does encourage efficient allocation of resources, as only those who value the resources will take them at the higher price.
- yes, I said this in multiple comments here, I don't see where the argument is.
"But wait," I hear you cry, "I value those drives (or that food), I just don't have the money!"
- nope. That would be me saying it, it's the majority of those who respond to my comments are promoting that view.
Are you sure you are trying to reply to my comments and not somebody else?
No, it's "market" in action, but not "free market" in action: they are *absolutely* not the same.
- again, unless gov't comes in and starts coming up with regulations on who can get the drives, what the prices are, etc.etc., then it's free market for this specific instance. Free market is literally market free of gov't regulations.
Most of the high-tech industry in SE Asia is supported by the government
- I don't know all the details of how every single factory operates in Asia, but I am pretty sure that they don't need gov't to help them at all, as they are the only actual manufacturers (as this story proves). Subsidizing something like that makes no sense. However that's NOT what I am talking about, I am talking about gov't coming in with regulations on how to distribute the hard drives and forcing the stores to behave in some unproductive and inefficient manner, creating space for corruption and distorting the market.
I am wasting my time on you, it's really a waste of time.
As to sellers turning 'non-profit'... it's you, who is building a straw-man, but also you are basically coming up with nonsense. Stores that set artificial rationing limits (1-2 drives per customers, all that), are either doing it to create more panic or they are not pricing the drives high enough.
OWS is protesting the wrong people and most of the protesters are doing it because they don't have a clue what's good for them. They are protesting 'capitalism', while actually protesting fascism/corporatism, where gov't and some corporations merge in a monopolistic orgasm.
They should be protesting the Federal reserve, Congress, Senate, White House and the Supreme Court if most of them actually understood WTF they are talking about, but looking at some of the demands I am not sure they are capable of that type of nuanced understanding.
I must have been asleep all this time then, now that a user with an ID that is 7.38 times greater than my welcomes me here!
Incorrect. It means that those who truly need the resource and who have the money to pay inflated prices will get the resource. Where it is "most needed" is irrelevant, and may well not be the most efficient. Welcome to one of the great lies about capitalism--that it is somehow naturally and magically "efficient". Nice try, though. I was wondering how long it would take for the propaganda machine to start up.
- that is a bunch of nonsense.
MANY people have enough resources to buy those drives at higher prices (not inflated - HIGHER). People who have those resources are not all buying those drives, because there are fewer people who need those drives than people who have resources to buy them.
So yes, the drives are going to those people who have the resources AND who have the need.
Your objection is that you believe you need that drive more than some guy with more resources? OK, if you truly think so - take a loan and buy that drive! If you have a BUSINESS case that you will produce something by buying that drives that will offset the cost of loan and will make you profit on that transaction, then you have a legitimate case that you need that drive, you can convince somebody that your plan will work, you'll get your loan and you'll get your drive.
You don't actually understand that, so whatever. You think you have more authority to say that you need that drive more than somebody with greater resources based on some idea of what 'fair' is. Well you do not. If you are unwilling to do all that work, it means you have just proven that you don't need that drive as much as the other guy.
Yes, this means the market is working fine at finding the efficiencies. The drive is more useful in the hands of somebody who is going to use it for production rather than consumption, because production is what economy is about, consumption is just a trivial consequence of production. The fact is - unless you are going to produce something with that drive rather than simply consume it, like a guy with more resources than you, then the fair and moral and correct and efficient thing to do is to sell the drive to the guy who can afford the higher premium.
---
As to Dell, HP, etc. The precise details are IRRELEVANT. The market is a discounting mechanism and it has to find the proper balance between supply and demand and price ratio. You can't understand it, because you grew up in a broken system, that doesn't want you to understand it.
Wait, so are you saying that a richer person who doesn't really NEED the drives will be buying them from under your nose as opposed to a richer person who needs the drives?
If somebody doesn't need the drive and they are richer than you are, they may still wait for prices to come down, otherwise they are wasting money.
If somebody is richer than you and they need the drive, they'll pay the premium for it and that's the correct way to do more efficient distribution. There are maybe 10 million people who want to buy the drives at their past prices, but the market figures that the supply will be limited to maybe 2 million drives. Now the stores have a dilemma - sell the drives now cheap, and be left without stock and still have to pay the rent and salaries, utilities, etc. Of raise the prices where the demand is cut by 80%, but allow the few drives that are in the store to cover the cost of the emptier stores standing there.
It's not about your moral indignation that you can't afford as much as another guy. It's about market finding its efficiencies, people who need the drives and have more resources than you affording them and stores still staying open and creating a signal to the manufacturers that there is a need for the drives even at those higher prices, so that more production is signaled to come on line.
You want artificial regulations to give you something you basically can't afford, well, that's how gov'ts destroy economies.
As to your line on
In a perfect Communism where all money is distributed equally then of course your theory would work, but that is a 100% different environment then basically the entire world.
- OH MY GOD. Is that what I am talking to here? Perfect Communism is when all money is distributed equally?
Are all those people PRODUCING equally? Because it seems to me you like nobody else to have more than you, but are you willing to work as much as everybody out there? Because I ensure you, you are NOT working as hard as most people who run their own businesses.
"perfect communism"... "money distributed equally"..... I hate this world.
I tell you what, you bet your lambda against my understanding of how politicians sell power and I'll take that bet. The point is not to look at some silly function, the point is that regulations never work as you think they should. Regulations create gray/black markets, create under the table dealings (corruption) and that's what I meant by 'ticket scouts'. What do you think your regulations do, when they limit the access artificially without raising prices where supply demand are balanced? Your gov't regulations always lead to less efficiency and more corruption, with politicians being the power brokers, selling power for money.
If steak is the only, or cheapest, food source, then you *do* have a moral right to the steak.* You just don't have the resources to afford it.
- if the stake is the cheapest thing around and people still end up buying it, then it's the correct pricing.
This is, in simplest terms, survival of the fittest then. If there are very limited resources, they HAVE to be rationed one way or another, and the market is the best rationing/price discounting mechanism. If you can't afford that stake BUT the stake still sells, then it's your problem to find a cheaper source of food or to rely on charity.
Of-course you can always come with: I will use force, well, that's also a market at work. Maybe you will use force, but who is to say that you'll win? Somebody with more resources to buy food may also have better protection.
As to morality - what is so moral about denying somebody WITH resources, somebody who CAN pay for the resources, while giving it to somebody who cannot afford it? I say it's immoral.
Saying: "everybody has a moral right to that stake" is fine, but it misses the point.
There is so LITTLE stake, that the prices could be set high enough to allocate that stake only to those, who can truly afford it. But this is the most moral outcome in the world!
If you are the ONLY person who can't afford the stake, you'll be taken care of by a charitable person.
If the majority of people can't afford the stake, it means the production of stakes is FUCKED UP. Exactly like the case today. Then you should ask the question: how come the PRODUCTION is so out of whack that most people can't afford that stake? If you are not completely brain dead, you'll realize that producers want the biggest market, but the thing that stands between them and production is artificial barriers (unless the earth is decimated by a meteorite or some such insane event.)
No, there is no such thing as gouging. If the seller's prices are too high, nobody will buy, and if they are too low, he will be making a loss, as he gets out of stock quickly, secondary markets form, and he is left with an empty store to pay for.
Price gouging is not an economic concept, it's a social construct, it's when people think the prices are too high, they don't like it.
Well, if they believe this is gouging and that prices really shouldn't be so high, they shouldn't buy and the prices will come down. If they are wrong, and there is real shortage, then they come around and buy and likely prices will go up again if shortage lasts.
Market is a price discounting mechanism, and you clearly don't have enough knowledge about it if you miss such an important point.
Price gouging is from point of view of those, who can't afford the prices, but it doesn't mean ANYTHING if the drives are still sold, if there is a market for them at those higher prices.
As to somebody losing a business over this - people are irrational, things happen.
You left out the other quaint aspects of the 19th century like child labor,
- of 19th century? Child labor existed always. 19 century brought it to cities, but it didn't create child labor. What do you think people did with children in 18th century, cuddled them with candy?
In FACT, 19 century free market capitalism made the people so productive, and started requiring so much specialization, that children:
1. Didn't have to be in the work force again, because their parents became wealthy enough through their productivity (land/capital applied to their labor) to be able to feed their children without sending them to work earlier.
2. Made the children a poor choice of worker, as more specialization required more knowledge, so 19 century actually pushed the children into more education, not more labor.
Gov't regulations don't stop child labor. Look at all the countries where there are regulations against it, but child labor still exists there. It's because it's POVERTY that drives child labor, not lack of gov't regulations.
Free market capitalism makes people productive and wealthy and that's what stops child labor (and slavery by the way, it's much more efficient to hire workers for pay than to own and take care of slaves, and free men work better.)
families rendered destitute when the breadwinner was hurt or killed in an unsafe workplace
- can't make on omelet without braking eggs. However the increase of wealth in that century allowed private charities to take care of those, who were truly in trouble. Gov't enforcing 'charity' is only stealing money and making people resentful of any real charity.
18/7 work just to make ends meet,
- can't make an omelet without breaking some eggs. UNTIL there is enough wealth in the system, everybody has to work more. Over 19 century the productivity grew so much, that people were achieving much more with much less work, and the century ended with a MUCH shorter work day. Henry Ford instituted 5 day 8 hour work day, paying 2 times as much as anybody else, $5/day, which was equivalent of 1.25 ounces of gold in a week, or over $2000 in current money per week (and that was WITHOUT INCOME TAXES). So in reality it's more like $3000 week, and eve that is not true, because the costs of living have risen so much thanks to gov't money counterfeiting.
Ford did it without unions but because of MARKET regulations - too much turn over in his labor intensive assembly lines. He even hired cripples, that nobody else wanted to hire, because his assembly line efficiencies allowed it to him.
He made people so productive, that with 8 hour days, with only working 5 days a week, his factory doubled production of cars after this, and the people were paid enough to maintain a family with a stay at home wife, 5-6 kids, pay for everything out of pocket and being paid enough to be able to buy a Ford car with 4 months of pay.
Great deals of deregulation do typically lead to a boom, followed shortly by a crash.
- ha ha ha ha, no great deals of REAL deregulations you haven't actually tried. Just removing partial regulations, while leaving the rest there, creates more imbalance that leads to more abuse. You are talking about Glass Steagal, but you are missing the important part of regulation that wasn't removed with it, what it was counteracting - FDIC and fake money.
The intrinsic problem with a completely free economy is that wealth attracts wealth and poverty attracts poverty
- no, that's intrinsic problem with command economies or with fascist economies.
Free market economies actually elevate everybody's standard of living, provide more new products, force prices to drop and create more leisure, that's what USA had in 19 century and beginning of 20th - almost completely free market.
There was nothing remotely free about the crony capitalism and skewed legal decisions of the 19th
- you don't know the definition of the free market, and 19th century saw a very small gov't, the regulations were almost non-existent and gov't was tiny. The gov't grew over 20th century past 1913, as the Fed was created and income taxes introduced, which allowed the gov't to cut into income and not into consumption via excise taxes, so gov't grew and regulations grew with it, because every new gov't dep't is there to do more regulations.
Free market is market free of gov't regulations, so you don't understand that. Of-course whatever amount of gov't that existed in 19 century was also corrupt, but the gov't was TINY, that's the point. It couldn't possibly regulate as much and be as corrupt as it became once gov't broke the barrier of growth and started counterfeiting money, monetizing its debt and cutting into income/savings/investment of the economy, not into consumption.
Over 19th century USA experienced massive economic GROWTH, unemployment was nearly non-existent and dollar strengthened by a factor of 2 over that time period, all while the wealth was increasing due to all the new businesses.
The gov't was dealing with the largest businesses, such as railroads and steel producers, but the rest of the market was basically free to do what it does best - find efficiencies without restraint, bring more new products to the markets and lower prices via competition.
China today sees real economic growth because it's so easy to start and have a business there, which is a DE-FACTO situation right now. You maybe should pay attention to all of the manufacturing being outsorced to China. That's not because companies love outsourcing, it's because they can only compete and stay in business by outsourcing, because regulations in the rest of the world are numerous and expensive and monopolies are the preferred way of doing business for gov't.
Face palm, alright, but it goes to you.
They aren't trying to make sure everyone gets a drive.
- right, that's NOT what I am saying.
I am not saying that a store owner is interested in some form of 'fair' distribution. I am saying that price discovery mechanism built is the principle, which will sort out the ordering of things, and it will figure out who is willing to pay how much for the drive, which allows those, who really need the drives to have access to them by cutting off those, who don't really need the drives bad enough to pay the premium.
This is not about some conscious decision on the part of store owner to makes sure 'everyone gets a drive' - this is not even possible with a shortage of drives. This is about store owner minimizing his losses and maximizing his gains, and the market acts as a discounting mechanism, which means the market ANTICIPATES a drive shortage and spikes the prices trying to find the balance, where people are still buying, so drives are still moving but the stock isn't emptied all at once by some third party, who wants to make the market by opening a secondary market (buying drives low from the store and selling high on the corner.)
My point earlier was that artificial scarcity added to the price hike only indicates that the store owner didn't discount the potential shortage enough, didn't raise the prices high enough to prevent a run on drives, so he is engaging in a worthless activity of trying to limit number of drives sold per person (maybe the store owner has different information than the buyers, so he actually wants to get rid of stock, and the limit thing is just to force the market into a more panic mode, but it's not a useful behavior for one store owner to engage into, it's better to raise the prices more).
As to 'goodwill' and all that, it's pure nonsense. Boycotting a store owner because he had higher prices for drives when there was a shortage (perceived or real) never works.
1. What are you talking about, there is nothing it the story that says they are making as much profit as they can.
2. You are using the word 'gouging' here and in other comments, because you don't understand basic economics. You think gouging is charging more than you like, especially after the store owner already bought the item out, which is pure nonsense. Store owner may buy the item, maybe he bought it on credit or debit, maybe he has a pay day DELAY even, maybe he is only paying for it after he sells it, there are all these possibilities, which you don't know. But it doesn't matter! Anybody can charge ANYTHING for ANY item, and 'gouging' is just a bullshit term because you can't have it because you are unwilling to pay what is being charged.
this is slashdot, very few have that type of understanding here.
I would go easy on him, he doesn't really know anything.
No, unregulated economy produces an actual economic boom, the way USA saw in 19 century. Then gov't becomes big enough to take over the nation because the private businesses created so much wealth, that gov't taxes were enough to buy too many favors, then the system is corrupted by politicians gaining power over markets and businesses, giving themselves power to regulate and tax income and counterfeit currency.
That's the beginning of the end of the economy and the end is not pretty, the end is where the poor truly starve as opposed to being gainfully employed, as most of the people are in growing economies that are free of gov't regulations and where prices actually go down and money gets more and more purchasing power. Of-course somewhere in between there the gov't gets so much power, that it regulates everything into oblivion, including any real economic activity and it also changes the education system eventually to make sure that the people lose any understanding of what real economies are about. Gov't makes sure that people cheer for more gov't, even though it's gov't that destroys the economy.
that's not in the story and obviously it's not true. What is more likely to be true is that they discover that their stock is emptied quickly, but that's just because somebody is buying all of it to resell at a more efficient (read higher) price at the corner, the way ticket scouts do.
Why are you replying to me with that?
As to rationing - whatever their believes are, they are wrong. This doesn't work and it only can lead to some corruption (well, I don't know if this case is big enough for that, but in principle). It can lead to corruption, same type of corruption you observe with ticket scouts, who are the only ones that the tickets will be sold to in many cases, because they know the sellers at the theaters and prices are artificially lowered by gov't regulations, thus inefficiency created where true efficiency could easily be found by just raising the prices and allowing price discrimination at the theater cash register, which would put scouts out of business, by the way.
you are observing free market in action with the HDDs here being priced higher than previously. If no gov't steps in and starts distorting the market with regulations on who may sell HDDs to whom and at what price and what the rules are, etc., then you are observing the market as it is supposed to function.
As to entire nations running free market economies - USA 19 century basically, and China today basically. They are as free market economies as we have observed in the last 200 years.
We also have pretty good references to very non-free market economies, command economies and how 'well' they do, also in the same time frame.
A funny song, but unless you are part of the government, I don't see why you'd want to run wars as your business. If you are not a gov't (or a gov't promoted weapons monopoly) wars are not really profitable.
Killing valuable resources is stupid (and people are also resources, they make stuff that others want.) The point is that you completely misunderstand what economy is. Economy is production and we want as many people producing as possible, so killing potential producers is really dumb. You have been trained to believe that economy is about consumption. Well, why don't the Fed just print a trillion trillion trillion dollars then and let you consume everything, see how that works out for you.
Actually it maybe one and the same.
To make a simple point: a person can only pay so much for disk drive, but a company can pay more. However a person is maybe willing to wait to see the prices come down (people wait all the time when new tech comes out for example, and the first ones to buy are normally 'rich' or companies).
However a company may need the disk to be PRODUCTIVE. In reality the 'rich' are most likely to be more productive with the goods than just those, who buy to CONSUME, because those who are 'rich' (as I said, companies often are richer than single individuals), are willing to pay the premium because it's important for their business.
Any productive business is more important than any consumer for the economy. Of-course in most of the western world (including USA), people lost understanding that it's production that drives the economy, not consumption. It's businesses that create jobs and it's businesses that pay salaries and build products.
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Of-course it can be just a richer individual than you (there is always somebody richer than you, unless you are maybe Warren Buffet or Gates or Putin and such), so obviously if the product is SO SCARCE that the prices has to go up to the levels where only the richest people can buy and they are willing, this is STILL finding efficiency for the seller!
They are not in business of charity, those stores as I understand, right? They are making a profit and if what they are selling SELLS at much higher prices, they should definitely sell at those prices.
Do you know what happens when there is inefficiency in the market and a store doesn't sell at the most efficient price, say it sells much lower than the price should be?
Secondary markets - that's where somebody buys and resells the stuff for profit. They are right to do so too, by the way, never mind how objectionable you may find the practice.
This is what price discovery is about. If the prices are too high and there are no takers, then the prices will go down. What do you think stores do all the time with prices? They are moving them up and down all the time. I build and sell software that helps the store chains and suppliers to do this - search for most efficiency via price discovery and by comparing product categories/brands/subbrands/suppliers/manufacturers/seasons/colors, etc. The prices always move as stores are searching for more efficiency and profit.
If the prices are too high, then there is something wrong as well, but if the prices are too low, then it's also a problem - the stores are then not doing their job.
You have just given an example that I will use to explain to you where your logic is flawed - if the stake is too expensive, then it means you cannot have it because the market efficiency was found.
If you have little money, it means you can't buy something that is too expensive for you, but this doesn't mean the market doesn't work! It works perfectly fine here as well. If stakes are bid on and there are only enough stakes and enough bidders so that the price is found at $5 for the stake, this means that the stake is sold at the most efficient price.
You shouldn't be trying to buy the stake then. If you are hungry and have $1 only and this stake is $5, it doesn't mean that you have a 'moral' right to that stake. This means that whoever paid $5 needs that stake AND can afford that stake.
OBVIOUSLY if the stake that somebody is willing to pay $5 for was sold at $1, that would be inefficient, and now you can turn around and make a profit. Sell that stake at $5 and put $4 into your pocket.
What you should do with that $1 is go to McDonalds and get something else to eat that they sell efficiently at those prices.
You should go back to this thread and read from the top. I address this - this is NOT a good idea and it doesn't work, because it immediately creates a secondary market, which will discover the price more perfectly (read - it will raise the price further to gain more efficient distribution).
You can re-enter the store, you can enter multiple stores, you can ask others to buy the drives for you, etc. The correct behavior is to raise the prices enough, so that only those who really need them buy them, but if the prices become too high, so that nobody buys, then you lower them a little and see what happens. That's basic market price discovery and it allows to queue up the resources for most efficient consumption, because some people can wait until the prices fall down, but some people need their drives, and if the prices stay low, they will NOT get their drives, because others will just buy them (and may resell them too.)
As to regulations - only market regulations are real and work, I am not sure what you mean by regulations your sense though, I'll leave at the fact that market IS regulating - the prices are higher and there is scarcity, but market will regulate further, and if prices are not high enough for most efficient distribution, there will be secondary markets. Somebody will buy those drives just to resell them at higher prices, which is really a good thing - this is what maximizes market efficiency.