The Off Topic Topic

[Valmy]

So there's a difference between rent control and anti-gouging measures, no?

Gouging (aka profiteering) is attempting to take extraordinary profit during short term spikes in demand for necessities (like we saw with toilet paper and sanitary wipes during early covid). At least that's my understanding.

And IMO it's absolutely worthwhile to have policy instruments in place to address gouging when ot occurs; while IMO it's also fraught to attempt to distort the market with long term price controls (and thus it should generally be avoided).

I don't think it's even a given that laws against price gouging are sensible.  Yes, it leaves a bitter taste when a disaster happens and someone spikes up the prices 5x or 10x for some products.  However, pragmatically speaking, the effect of such spikes is that people are less likely to hoard something that momentarily becomes a lot more valuable, and owners of such products might go the extra mile to be open for business if they can make a killing.

At the start of the Covid epidemic, it seems like price gouging at least in my area was tolerated.  The result of that was that you could buy face masks if you really wanted to long before the shortages were alleviated, but obviously at $1+ per mask you wouldn't be stocking up 20 boxes.  At the old prices, the lucky few would snap them up, because why not?  Your life and your family's life is more important to you than socially efficient allocation of face masks during the shortage.

Again I think they only make sense in very specific circumstances. Massive price increases due to lack of supply is a terrible reason to implement price controls. In that case you need to increase supply.

It only makes sense to have rules against price gouging if the market is under the control of monopolistic forces, either by design or not. For example, utilities have rates that are set and controlled because they are monopolies. So if you have Amazon, or whomever, controlling 80%+ market share in something it might make sense to do some price controls. I think a better strategy is to break monopolies up and let competition work itself out but there we go.

[DGuller]

I can see an argument against price gouging when a monopoly exists in the place and time due to circumstances.  Let's say you drive up to a remote gas station at night, and the gas attendant heard your vehicle sputtering.  He leaned in and confirmed that your fuel gauge is on E.  He suddenly changed the price to $100 per gallon, with 5 gallon purchase minimum.  The gas station in general is not a monopoly, but due to your particular situation you did wind up at its mercy, more or less.  I don't think there are many benefits in this case from allowing the guy holding your testicles in his hand to squeeze.

[Barrister]

I can see an argument against price gouging when a monopoly exists in the place and time due to circumstances.  Let's say you drive up to a remote gas station at night, and the gas attendant heard your vehicle sputtering.  He leaned in and confirmed that your fuel gauge is on E.  He suddenly changed the price to $100 per gallon, with 5 gallon purchase minimum.  The gas station in general is not a monopoly, but due to your particular situation you did wind up at its mercy, more or less.  I don't think there are many benefits in this case from allowing the guy holding your testicles in his hand to squeeze.

You can make the same sort of argument for drug prices - the government (through IP law) gives a company a monopoly on a certain drug for a period of time.  Let's say a drug company comes up with a Cure For Cancer(tm) - and wants to charge $1 million per dose.  I think there's room for the government to regulate what is charged since it's only a monopoly because the government gives it one.

As for your remote gas station though... I've been to remote gas stations along the Alaska Highway / Yukon.  I've even come in to some on fumes.  While yes, you could theoretically do so, gas stations in such remote communities are very, very susceptible to the local population, so I don't think it's realistically ever going to happen.

[Razgovory]

What about price floors?  That's a price control.  The government keeps the prices for grains and produce artificially high to keep farmers afloat.  

[Valmy]

What about price floors?  That's a price control.  The government keeps the prices for grains and produce artificially high to keep farmers afloat. 

That is. But they did something else and subsidized farmers instead.

[Admiral Yi]

What about price floors?  That's a price control.  The government keeps the prices for grains and produce artificially high to keep farmers afloat. 

I'm pretty sure this ended with the Great Depression.

[Valmy]

What about price floors?  That's a price control.  The government keeps the prices for grains and produce artificially high to keep farmers afloat. 

I'm pretty sure this ended with the Great Depression.

I know farm prices suddenly crashed after WWI, but I was not aware price floors were tried to address that.

[DGuller]

What about price floors?  That's a price control.  The government keeps the prices for grains and produce artificially high to keep farmers afloat. 

I'm pretty sure this ended with the Great Depression.

I think price floors for milk exist to this day, or at least that's what I recall reading from somewhere.

[HVC]

What about price floors?  That's a price control.  The government keeps the prices for grains and produce artificially high to keep farmers afloat. 

I'm pretty sure this ended with the Great Depression.

As with Valmy I think you guys just switched to direct subsidies. As for dairy, does the US still keep cheese bunkers?

[Admiral Yi]

I know farm prices suddenly crashed after WWI, but I was not aware price floors were tried to address that.

i somewhat mispoke.  Roosevelt limited agricultural output to prop up prices.  Surely you've seen the pictures of pouring milk into the ground and destroying potatoes.

[Josquius]

I finally tried Five Guys.
There was a special offer so I didn't need to take a bank loan to do so.
It was.... OK.
Obviously a better burger than the usual fast food. But I wouldn't rate it with  basically any independent place.
It was very fragmentary. Fell apart quick.
And Gods were the chips salty.
Not getting it's success.

[Syt]

I tried Five Guys here once, was also not very impressed (we have IMO better alternatives, like a decent smash burger place now, or Weinschenke's burgers). Especially not for the price. And fully agreed on the salty fries. Jesus fucking Christ. Speaking of - that one burger place has fries how I love them. They double fry them, and they're nice and crunchy without being greasy.

[Jacob]

So there's a difference between rent control and anti-gouging measures, no?

Gouging (aka profiteering) is attempting to take extraordinary profit during short term spikes in demand for necessities (like we saw with toilet paper and sanitary wipes during early covid). At least that's my understanding.

And IMO it's absolutely worthwhile to have policy instruments in place to address gouging when ot occurs; while IMO it's also fraught to attempt to distort the market with long term price controls (and thus it should generally be avoided).

Why is it the storeowners responsibility to stock supplies for your emergency?  We're not doing anything in return.

I'm thinking of things like people buying up all the bottled water or toilet paper at all the stores and selling it on FB for x10 store prices; and for individual stores jacking up the proce on the baby formula x10 right after an emergency instead of limiting purchases per customer to ensure a more even distribution to people who need it; or massive surge pricing on uber as people attempt to get away from a calamity.

To me that is part of the basic crisis management function of government, to ensure social resilience in times of emergency.

The quid pro quo is part of the larger social contract that includes not having armed mobs storming your place of business to steal your stocks as desperation fuels opportunism.

From my POV this is about spikes in supply and demand due to crises, not long term market conditions. I agree that in "normal" conditions "unfair" profit-taking should be addressed by market competition.

[Admiral Yi]

I'm thinking of ...individual stores jacking up the proce on the baby formula x10 right after an emergency instead of limiting purchases per customer to ensure a more even distribution to people who need it; or massive surge pricing on uber as people attempt to get away from a calamity.

That's my point.  People could stock up on baby formula.  But they don't.  Anti gouging laws are a requirement for stores to do your emergency stocking for you.  What do they get out of that?

[Josquius]

I'm thinking of ...individual stores jacking up the proce on the baby formula x10 right after an emergency instead of limiting purchases per customer to ensure a more even distribution to people who need it; or massive surge pricing on uber as people attempt to get away from a calamity.

That's my point.  People could stock up on baby formula.  But they don't.  Anti gouging laws are a requirement for stores to do your emergency stocking for you.  What do they get out of that?

I'm not seeing any suggestion of a law against being out of stock.