[Patrickov]

That's human greed and selfishness for you, it is a hard struggle to implement anything in the interests of the common good, (not just the interests of private wealth and birth and connections), much less something like Socialism.

But surely it's important to try to make the human condition a little better, isn't it?

Let me try to rephrase it a bit.

Between socialism and barbarism, I think the latter will come first, because it is quicker to come up with, and it is much more energy efficient to implement something else when there are less people to deal with.

[Rich]

That's human greed and selfishness for you, it is a hard struggle to implement anything in the interests of the common good, (not just the interests of private wealth and birth and connections), much less something like Socialism.

But surely it's important to try to make the human condition a little better, isn't it?

Its important for many, perhaps most, human individuals to feel they are making the human condition a little better. This is why it was important for Emma Thompson to be able to fly in from LA to the London climate protest. What cold hearted Scrooge would wish to deny her that pleasure, would wish to deny her something that was clearly so important to her phycological health and well being? Its the same with Megan and Harry, they just want to feel they are making the world a better place, and they're willing to endure the most terrible jet lag in order to help the world. What kind of hate filled Republican monster would not be prepared to pay a few extra pennies on their taxes to allow them to do this? Particularly as both of them had far from ideal childhoods.

[annatar1914]

Its important for many, perhaps most, human individuals to feel they are making the human condition a little better. This is why it was important for Emma Thompson to be able to fly in from LA to the London climate protest. What cold hearted Scrooge would wish to deny her that pleasure, would wish to deny her something that was clearly so important to her phycological health and well being? Its the same with Megan and Harry, they just want to feel they are making the world a better place, and they're willing to endure the most terrible jet lag in order to help the world. What kind of hate filled Republican monster would not be prepared to pay a few extra pennies on their taxes to allow them to do this? Particularly as both of them had far from ideal childhoods.

You are framing this in terms like I am some kind of Western Liberal. I don't care about virtue signaling hypocrisy and incomprehensible emotive feelings in place of ideology, I care about the common good of the working people, those who live and create all value in society who are consistently screwed over by the Elites.

I don't want a new coat of paint on the mansion, pleasing to the eye, I want it burned down to the ground.

[Puffer Fish]

I think he simply means that according to neoclassical economics, the demand and supply for a given good or service will always be equal at equilibrium. In that limited sense, he is correct. However, you only need to consider famine conditions to realise how autistic this is. During a famine, the supply of food decreases. The need for food remains the same, of course, but because there is less food to go around, the price goes up. This has the effect of rationing the food out to those who can afford it. Those who cannot afford it, of course, starve to death. At all times, the market is free and is at equilibrium, and the demand and supply of food are always equal, so that there was never a 'shortage' of food. Yet many, many people will have starved to death. Why? It is because of the abstract and one-sided definition of the word 'demand' in neoclassical economics. The need of the starving people for food never shows up as a demand in the marketplace, for the very good reason that they have insufficient money to buy any. In that situation, most functioning human beings would say that there was a 'shortage' of food, since the streets are now littered with emaciated corpses, but a neoclassical economist would deny that there had ever been any shortage of food, since all demand for food in the marketplace was satisfied with a supply of food.

That may be a very valid point, but it is pretty much completely besides the point I was trying to make in this thread.

I'm saying that in some situations, market rationing according to price is not a very good explanation of what's going on, and the type of situation that occurs ends up looking more similar to standard shortages that occur under artificially-imposed price fixing systems.

I'm saying this can, and often does, exist in a free market. And the reality is contrary to the way in which a lot of free market economists understand economics.

[Puffer Fish]

I didn't mean this thread as a critique of capitalism, but I meant it as a critique of the simplistic general principle held in the prevalent school of economics.

This is more an intellectual critique of economic principles.

It's sort of totally different perspective of viewing things.

Those of you here who are against capitalism (and I know there are many of you) can view this view with praise, because it shows that free market economists are basically sort of wrong in one of the fundamental precepts they hold at the core of their school of thought.

The concept being shown here is that free market "supply and demand" interaction does not always mitigate "First Come, First Serve" random allocation rationing. Which is what their major criticism is against non-free market economies.

[Puffer Fish]

When price is very inelastic for a group of renters, and relatively very inelastic (over that given demand-supply interaction range) for the owners renting out housing, what you're going to get is a situation where exact price becomes a very weak determinant, and other factors (like random happenstance, or preference for certain tenants) become more of a determinant in who gets the housing.

An small increase in price paid by the people seeking to rent won't really result in a change in the supply. So a small difference in price will not really determine which individuals get it.
i.e. It does not really behave like rationing to the highest bidder.

It's very appropriate to talk of "shortages", even though according to "the classical economic view", "shortages" shouldn't really occur because the price (according to the free market theory) gets automatically set to a level where there will be no people willing/able to pay the going price who cannot buy the good.

[Puffer Fish]

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[Rugoz]

I didn't mean this thread as a critique of capitalism, but I meant it as a critique of the simplistic general principle held in the prevalent school of economics.

This is more an intellectual critique of economic principles.

That critique is unfounded. Market frictions can be modeled in a neoclassical framework. The 2010 Nobel went to Diamond-Mortensen-Pissarides for modeling markets with search frictions for example (work done in the 1970s).

[Puffer Fish]

That critique is unfounded. Market frictions can be modeled in a neoclassical framework. The 2010 Nobel went to Diamond-Mortensen-Pissarides for modeling markets with search frictions for example (work done in the 1970s).

Why do people seem unable to comprehend my point?

This has nothing to do with market frictions.

I'm saying scarce quantity rationing can take place even in a free market, and price will not really play a role in allocating who gets things.

To try to put it in other words, the market frictions in this scenario would be very small. Yet they would still overcome the influence of price. Because the demand curve is so inelastic. (And also partly because in such a situation as renting there are so many intangibles, and apparent risk becomes more of a factor than small differences in price)

In other words, the landlord could really care less whether one tenant can pay $700 and one tenant can pay $800, if they feel one of those prospective tenants is twice as likely to destroy the entire place.

But I'm describing a theoretical example where even the most trivial, seemingly insignificant, market frictions could end up playing the determining factor in allocation. And in the hypothetical situation there were absolutely no market frictions whatsoever, (if we assume complete demand inelasticity), the allocation would take place by random chance.

[Rugoz]

Because the demand curve is so inelastic.

A steep demand curve does not imply shortages.

In other words, the landlord could really care less whether one tenant can pay $700 and one tenant can pay $800, if they feel one of those prospective tenants is twice as likely to destroy the entire place.

Well then you have to incorporate/model risk.

[Sivad]

woops, wrong meeting.