Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Don't Blame Me, I Voted For Kerry -- Ignore unavailable to you. Want to Upgrade?

To: TimF who wrote (78500)	7/28/2006 9:23:04 PM
From: Cogito	Read Replies (1) \| Respond to of 81568

>>"...I would have reached this conclusion by pointing out that any alternative to freely adjusting prices involves some non-price method of rationing. Any practical, realistic method apart from rationing by price hikes will involve arbitrariness at least as great (I think greater) than whatever arbitrariness there is in income distribution. One alternative method of rationing is queuing. But surely first-come, first-served is quite arbitrary. Perhaps the father with starving children will get to the front of the line, but who’s to say that the drug dealer won’t beat him to the front of the queue? Indeed, the father with starving children likely has lots of important tasks to carry out at home in the immediate aftermath of a natural disaster. These tasks might well keep him at home too long to get a favorable spot in the queue, or, if he does get a favorable spot, he’ll waste lots of time queuing rather than being at home with his family during an especially dire time of need. An even more likely alternative to rationing by price is rationing by personal connections – family ties or political ties. The poor family with starving children is unlikely to have as many personal and political connections as are wealthier people in town. The outcome of rationing by connections will almost certainly be biased in favor of wealthier, more-prominent citizens. One great advantage of rationing by market prices is that they reduce to a minimum the role of arbitrariness. Price are, in other words, a great equalizer. Anyone who is willing to pay the market price for a good or service is just as likely to get that good or service as is the seller’s mother, neighbor, or bowling buddy." "...What’s needed most urgently in the aftermath of a natural disaster is a quick infusion of replacement goods and services. Keeping post-disaster prices artificially low will slow this infusion, making the people who are least-wealthy in terms of connections and ability to bribe much worse off."<< Tim - You seem to believe that "the market" can solve all problems. But the above exercise in the misuse of logic is ludicrous, and demonstrates how there are situations in which a free market is intrinsically unfair. What the above postulates is that in an emergency, as in the aftermath of a major hurricane, the least arbitrary and most efficient way to distribute goods and services to those in need is to let supply and demand determine prices. Since supplies will be low, prices will be high, so only those "willing to pay the market price" will get the goods. Does it not strike you as obvious that for a lot of people, "willingness" is not the issue. If you don't have the money, you can't pay for the goods, no matter how willing you might be. Saying to someone whose home and possessions have just been destroyed, "Sorry, if you're not willing to pay the price, you can't have food" is not a way to solve the problem. - Allen