It shocks me that this article could be written without mentioning the phrase "price elasticity" a single time (a word I learned in a class literally numbered "econ 101").
> That “equlibrium” is an assumption that there are forces in the market that will moderate excess - that the market is self-balancing. This is the argument against regulation or government intervention.
> For example, it might be assumed that if supply shrinks, that prices will increase, which will reduce demand because fewer people can afford it, which will lead to a rebound in supply - which means prices will drop again. This seems intuitively correct.
About here would do it.
Economics terminology is important because it gives us a shared foundation for science and discussion.
So when people discuss economics but act like they have explored a novel concept that is economics 101, it tends to get mentioned.
The author's point here seems to be a bit different than price-elasticity, though. If this were a price elasticity article, then you'd expect this sentence:
> There’s another possibility, however. Imagine that there is a demand for a specific luxury good - say, ivory from elephant tusks.
to be followed with something like "but as it happens, in some cases like luxury goods, demand can actually increase as prices increase! This is called a Veblen Good, isn't that interesting!"
The author instead makes a different point: the 'supply' of elephant ivory can increase despite the underlying rarity of the natural resource, because rising prices create more willingness to poach, and market prices are about how much you have to pay the poacher, not the elephant. This isn't necessarily self-balancing because eventually you do run out of elephants entirely.
This doesn't really strike me as a comment about price elasticity per se.
But then, the following example with elephant tusks doesn't fit the narrative of an alternative situation to elasticity, because elephant tusks are not inelastic; they are nicely elastic.
Inelastic items are:
- things that are dirt cheap, so nobody cares how much they exactly cost, like 5 cents versus 10 cents for a candy.
- things that people desperately need, and for which there is no alternative, so they fork up the money when the price is jacked up.
Poachers cannot do anything that will keep the demand the same while prices go up due to low supply due to ivory not being an inelastic good.
It read more like a slight against the LToV than anything else.
The desire to extrapolate economic interpretations from toy examples is unending. See also the two-people-with-cows-on-an-island example that gets paraded around and has never existed except in the heads of the terminally marginal-pilled crowd.