CDR: Re: A famine averted...

[Tim May]

At 12:19 PM -0500 10/5/00, Sean Roach wrote:
>At 10:55 AM 10/5/2000, Marcel Popescu wrote:
>
>>There's no person called "market", therefore it has no "interest". It's a
>>decision of the current resource owners - and when demand increases (as in
>>the case of a major disaster), they *have to* increase their prices until
>>the supply is equal to the demand (if they don't, the first buyers will sell
>>what they bought on the "black market" to those who value it more). Basic
>>economics, even US public schools must teach that much.
>>
>>The stores might have been "depleted", but the high prices would have made
>>it profitable to sell food there, and someone would have done that.
>>Furthermore, the expectation of high prices due to an impeding disaster
>>would have created incentives for "hoarding" - that is, gathering as many
>>resources as possible, which would have attracted imports BEFORE the
>>disaster. Price fixing destroys any incentive for spending now in order to
>>profit later.
>
>The public schools do teach this much, but it's an elective.  I 
>didn't like Vo. Ag.

"Vo. Ag." in a public school is certainly not where I would expect 
basic economics to be taught (more's the pity, but this is how things 
are).

Your words here indicate you don't understand the economics of 
middlemen, lubrication of markets, risk arbitrage, etc. Suffice it to 
say that "speculators" perform an incredibly important function. See 
any non-socialist textbook. (Even Samuelson, for example, as opposed 
to Prof. Raisa Gorbachev's text on socialist economics.)


>Yes, if you ONLY restrict inflation, those who come first can 
>purchase your full stock and resell it to a higher bidder later. 
>Simple supply and demand.  From my perspective, this would only work 
>if the government also limited the buyers to a set amount, and then 
>included some element to restrict someone from hitting several 
>stores for the same quota.  The three methods I can see to do the 
>latter are, stiff penalties for buying more than allowed, ration 
>tickets, and both.
>
>Did the government have such limits in place?

See basic textbooks.

Jeesh.


--Tim May
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