Prices do influence our behavior. When we see what we think is a bargain we tend to want to buy more of it, and when the price seems too high we buy as little as possible. So, yes, raising price to limit demand is exactly Econ 101 and applies whenever supply is limited but demand is high. But if raising prices during an emergency is illegal then the prices stays low relative to demand, so the limited supply will be quickly consumed. Thus the question: would you rather pay more and have what you NEED available, or is it more important to prevent profiteering?
I guess I’d pinch my nose and have what I need available, despite high prices. It’s unfortunate that too many folks will sell their soul for a few extra bucks. (but then, I’m not perfect either)
Do you think that is a decision which you should be able to make for yourself?
Bill, if you’re suggesting there should be government interference, I’d say no to that. As flawed as the system might be at times, flawed bureaucrats running things could be worse.
I think those people will have their own exhibit when the next species is visiting the museum of human extinction.
quote:
Originally posted by banjo bill-ePrices do influence our behavior. When we see what we think is a bargain we tend to want to buy more of it, and when the price seems too high we buy as little as possible. So, yes, raising price to limit demand is exactly Econ 101 and applies whenever supply is limited but demand is high. But if raising prices during an emergency is illegal then the prices stays low relative to demand, so the limited supply will be quickly consumed. Thus the question: would you rather pay more and have what you NEED available, or is it more important to prevent profiteering?
This rather assumes that paying more for necessities is a freely available choice. As usual you have started a discussion that can only be continued by straying into a banned topic. So I'll just ask you to opine on the morality of artificial restriction of otherwise elastic supply to maintain high, or extremely high, margins, which is the nature of most price gouging and profiteering.
In your theoretical case, if you assume the fantasy of efficient and frictionless markets, the guy making a 100% net profit on goods freely available elsewhere will be quickly undercut by the guy who is happy with 50% and so on until we get a price that reflects input costs, risk free returns, risk, cost of carry, transport costs, storage costs, opportunity cost and other pesky factors that don't seem to have been covered in your Econ 101 course.
Course...
All thos folks in the disaster area..may be without power or internet..
Soo.. it may be easyer ..n..cheaper..
Fer them to use ..Crypto...currency..... :0/
quote:
Originally posted by STUD figmo AlCourse...
All thos folks in the disaster area..may be without power or internet..
Soo.. it may be easyer ..n..cheaper..
Fer them to use ..Crypto...currency..... :0/
No power. No internet. That would make it impossible to use crypto. Just about the only thing I use hard cash for nowadays is the coin box at the club that lights up the snooker tables. But I still have a stash of cash just in case.
quote:
Originally posted by AndrewDquote:
Originally posted by STUD figmo AlCourse...
All thos folks in the disaster area..may be without power or internet..
Soo.. it may be easyer ..n..cheaper..
Fer them to use ..Crypto...currency..... :0/No power. No internet. That would make it impossible to use crypto. Just about the only thing I use hard cash for nowadays is the coin box at the club that lights up the snooker tables. But I still have a stash of cash just in case.
Mebee you can see...
Why...
It may be...cheaper... ;0)
I'de glady pay you ..Tuesday..fer a hamberger today.... ;0)
No Andrew, I am not assuming anything. I am not talking theoretical cases here but actual ones. Both the opportunist and the fuel prices come from real events, though I have no knowledge of the actual prices and profits involved. My questions are designed to provoke conversation, and the nature of the conversation which I am interested involves people's attitudes and values, not their politics, although legalities are very much a part of the story, as both cases are illegal. My question is: should this be illegal, and why? Are those laws helpful or are they based on illogical emotion?
Is the desire to prevent profiteering sufficient reason to suffer the resulting shortage of needed items during an emergency? Is $15/gallon--today only---too much to pay for fuel? And is "today" the same as every other day? And, who should decide that question?
My cynical opinion is that price gouging is a normal outcome of our economic framework, as monopolization is the logical—and intentional—outcome of the exponential growth of a business with a goal of market capture. It is in fact immoral to profit from the misery of others, but our economic system rewards such practice handsomely. We forget that the "invisible hand" that guides our economy (Adam Smith) was an accepted concept because (most of) our founders had a moral compass (not Hamilton), and assumed that outrageous and immoral behavior would be checked. This is no longer the case.
Prices have always gone up.That's just a given.
Yesterday a doc was on CBC radio was bemoaning that he was starting his practice with about $300,000 [school/education] debt. I wondered aloud about how much different that is from when my wife and I started out [teaching, btw, not MDing] .... my student loan was close to my gross first year pay, and my wife's was somewhat more, and fwiw, we had no trouble paying off our loans.
So just now I "looked it up" ....average MD salary in MB is about $305,000. Acknowledging that extrapolation is frequently misapplied and that individual circumstances can vary markedly, does the doc have a legitimate complaint? Did the [relative] price go up?
The doc has no complaint, imo. The price of educating oneself , without checking stats, I believe is about the same, as evidenced by your examples, Owen. I told my kids not to worry about student loan debt,, if you work at something you enjoy you’ll have a better life.
The doc made a wise investment. Those pursuing expensive art history majors, uh, maybe not so much.
SMVTI was $900/yr. for 2 years and a diploma in Automotive Technology.
Our graduates had years of 95% employment in shops and dealerships.
I used my knowledge to maintain my own boat and truck equipment saving a lot of money on hiring stuff done when lobstering or dragging for sea urchins.
.... and furthermore and more importantly .... back when schmucks like me were making $1.00 per hour, a bottle of beer in the pub [or two draft, and a 10 cent tip] was typically a dollar. It's been a while since I've been in a pub, so I'm guessing that an hour at minimum wage now might buy 2 beers in the pub. Did the price go up/down?
In '74 I moved from MB to NWT to work. In MB, beer at the vendor was $3.05 a dozen. On one of the first days up there, I got out a fiver and, "I'll have a dozen Canadian please." The guy sets the box up and says, "That'll be 6 dollars." I wasn't watching all that closely, so said, "I just wanted a dozen, not a 24." He replied dryly: "That is a dozen." 
But, but, but my gross pay had jumped almost 50% .... and as a bonus I met my soon-enough-to-be wife .... all's well that ends well. 
I guess this qualifies as hearsay ... I've heard that the workers on the "power crews" that go into areas after natural disasters to get things up and running are paid a pizzpot of doh-rey-me. I've not tried to refute/verify it, but the figure I got was $3000/day for a hydro worker. The split between worker and whatever agency might be involved wasn't known; ditto for what expenses might be covered. Supposedly it's lucrative enough that workers re-arrange their holidays in order to participate. Like I said .... I've not checked into it. [To my knowledge, "Where there's smoke there's fire." typically doesn't materialize out of thin air.]
If somebody's willing to pay it, I'd be a nut to pass it up???
^^ I would pass it up because I'm not going out into a storm and do whatever is done to restore power. I am thankful that some will, and they deserve a good payday for the hard and dangerous work that they do.
There are many folks n services we should be greatfull for..
One might be Fire Fighters n Rescue Teams..
When there were more local farms there was much less price gouging.
Prices were more stable over longer periods of time.
If $3000 is a good payday, why not a better payday [$5000?] or even a great payday [$10,000??] ? So long as an insurance company, or a government, is footing the bill should I care? I hope* nobody's inferring that there's a positive relationship between gratitude and $$.
* - but I'm not 100% sure. 
There need to be limits on what can be charged for something.
Anything allowed with no parameters is extremely reckless and unfair.
We can't set our own limits because this can disregard the needs of our neighbors.
When we set prices it should be done with everyone's interests at heart.
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Originally posted by steve davisThere need to be limits on what can be charged for something.
Anything allowed with no parameters is extremely reckless and unfair.
We can't set our own limits because this can disregard the needs of our neighbors.
When we set prices it should be done with everyone's interests at heart.
Steve, that's been tried numerous times in the past, in a variety of different product/service categories.
It almost never works over the long haul. In fact, it often results in scarcity of the products and services with the price controls set upon them. It also tends to create great power for those doing the controlling, which all-too-often leads to corruption.
What you're advocating is morality and human decency. That's noble. Market forces aren't immoral - they're AMORAL. They work irrespective of philosophical values. Although that can seem cruel, history shows them to be the most efficient way to get things where they're wanted or needed.
Edited by - eagleisland on 10/05/2024 09:05:10
In '71 Nixon froze the price of chicken and beef, among many other things---including wages (how would THAT fly today?) So farmers drowned their chickens and slaughtered their beef because the cost to raise them and market them exceeded what they were allowed to charge for them. So, yay, cheap meat for all? Or no meat for anyone?
Seems that you can't just wave a magic wand and have prices be whatever you wish.
Would Steve be happy if the price of lobster was below the cost of going out and getting them? Anyone think that whoever would be charged with setting prices would have the knowledge of your business and what is required to continue operations?
