[_pi]

> price controls really are bad,

Citation needed and not from some ooga booga free marketer.

Price control schemes exist in almost every country and in the US, every subsidy is a form of price control. Price controls are not just ceilings and floors. The Prime Interest rate is a price control for money. Ration cards are price controls.

The reason that price controls are dangerous to an economy (esp. a capitalist one) is typically that if you're controlling for price (via floor and ceiling) you have to also control for distribution. Price controlled goods must be distributed as a nonprofit service with limits rather than a for profit enterprise. That's often the "fuck up" that's most cited but that's a "learn basic economics" issue.

Literally that was Nixon's entire fuck up, and it was compounded by the death of Bretton Woods. Price controls worked just fine before/during/after WWI and WWII.

Public transit is the most obvious form of price controls that work because the distribution and the commodity/service are both run as a nonprofit service.

Also if you care about the whole 'OMG BLACK MARKETS' thing, see distribution, and understand that if you have a price that actually represents the cost of delivering a commodity to a consumer, a black market forming around that commodity is the same kind of market as a "free market". It is simply dudes trying to get the most amount of profit for arbitrage of a good they get at cost.

Also "subsidies don't work", the subsidy often not a consumer subsidy it's a producer profit subsidy. See EV's which all have subsidies built into their price except the Leaf.

You see the problem here? In order to actually do this correctly and have the desired effect on consumers, you need everyone to open their books. That's not going to happen in a capitalist system. So their alternative is "get lucky". Private profit guides economic policy more than the actual data or methodology.

The more interesting thing of "regulation" here. Is if the government can effectively regulate a company's backlog. Apple's walled garden is intentionally constructed on their side such that there cannot be competition because the controls for such competition are unbuilt. The PWA issue in the EU shows that if you take them at face value which I would having worked with Apple products and done a bit of jail breaking back in the day. So effectively they need to create public features for supporting alternative wallets in a secure way.

Outside of iMessage, wallets are the only real thing the gov has to stand on.

Super apps are just a semantic exercise.

Cloud-streaming is a non-issue Apple doesn't compete in a cloud streaming vertical. Apple Arcade is just a subscription to an app store. They don't stream the games.

The Smart Watches thing is also bunk. Samsung does the same thing, with watches and headphones. If I switch to a Google Pixel my headphones lose features. Unless the government is in the mood to create and regulate open tech standards this a nothing burger.

It's in practice arguing that Apple cannot have a private SDK which I would be fine with but they're not actually arguing that.

The reason that this is not like US vs MS is because MS's settlement did not result in forcing MS to CHANGE the code, only allowing OEM's to bundle other browsers. US vs MS in practicality was just a big nothing burger. Not even the EU government is in a place to regulate and enforce Open APIs.

Also speaking of ooga booga free marketers. Milton Friedman predicted that US vs MS is going to be a dark age of government regulation of tech and prevent innovation. Lmao.

[anon373839]

To put it more precisely, price controls create market distortions and Pareto inefficiency. Though I think they are worth the cost in some instances, they aren’t a scalable solution to anything. Also, it’s almost impossible to know what the “correct” price of a good should be because the factors that determine that are part of a very complex network.

[_pi]

In context you've unlocked the tautology that underpins capitalism.

> Pareto inefficiency

> almost impossible to know what the “correct” price

Yes it's really really hard to price things, but the market itself is Pareto inefficient unless you labor under the axiom that the market price is the "correct" price, which it cannot actually be.

> market distortions

Why is this a bad thing?

> they aren’t a scalable solution to anything

Do you believe in UBI or that UBI is scalable? That's a price control. Again every public transportation system in the world is price controlled, market distorted, and Pareto inefficient. So they are a scalable solution to providing a public service of regional/urban travel.

> Also, it’s almost impossible to know what the “correct” price of a good should be because the factors that determine that are part of a very complex network.

Most companies that are not trying to grow and are trying to turn a profit literally have prices that not only take into account the cost of the good but marginal profit on a unit basis. This chain goes all the way back to digging out the raw materials from the earth.

Your entire "complex" network of calculations is done there. Why can it not be done elsewhere?

[anon373839]

I think we might be talking about different things, because some of the issues you've mentioned are not examples of price controls or direct market intervention. UBI, for example, is a post-market transfer payment that is certainly a "cleaner" way to redistribute wealth than to futz with individual price signals. (I don't actually support UBI, but not for reasons relevant to this discussion.)

> the market itself is Pareto inefficient unless you labor under the axiom that the market price is the "correct" price

This mischaracterizes my original argument. I don't think anyone who is serious believes that real-world markets establish optimal prices. Perfection isn't relevant: the question is whether markets perform better than government planning, and fortunately we don't have to speculate on that question. Resoundingly, the historical record shows that central planning reduces the total amount of wealth available to be distributed.

> Why [are market distortions] a bad thing?

An example might be useful. Consider when California capped retail electricity prices in 2000. Even though this was far from a competitive market to begin with, the result was predictable: shortages. The price caps reduced utilities' incentive to expand production, and simultaneously increased consumers' incentive to use electricity. (There were other factors involved in this debacle, but the price caps were a key feature.)

> This chain goes all the way back to digging out the raw materials from the earth. Your entire "complex" network of calculations is done there. Why can it not be done elsewhere?

I think you have to broaden your field of view on this a bit to appreciate the problem. You're only considering the perspective of a single supplier in a single market, in isolation. In reality, there is a complex equilibrium that results not only from the forces acting inside a market, but also from the forces exerted by other markets.

Suppose you're a pencil manufacturer. Of course you can calculate some output price for your pencils that reflects costs + some profit margin. However, we don't know if that output price will incentivize good pencil-purchasing behavior. Perhaps you're the only seller of pencils worldwide, and the price is too low. In this case, people who don't really value pencils buy them anyway, and your inventory is depleted. Now, pencils are sitting unused in random drawers, while there are art classes that have to be canceled because the students can't get the supplies they need. (You've mentioned a need to control distribution, but haven't suggested a way for these distributive decisions to be made.)

Consider also that graphite is an input price. How much should that cost? It's useful for making pencils, but it's also used in nuclear reactors and lithium-ion batteries. If the Department of Homeland Prices is going to choose a good price for graphite, they're going to need to decide how many pencils the world needs, how many nuclear reactors, and how many lithium-ion batteries. Of course, those items feed into other items...

[_pi]

Any payment transfer is a complex price control on money. UBI literally means for an individual, for a certain period of time, the first $X of spend cost nothing. That's a complex price floor for a complex commodity (money itself).

> markets perform better than government planning, and fortunately we don't have to speculate on that question. Resoundingly, the historical record shows that central planning reduces the total amount of wealth available to be distributed.

Nobody actually makes this argument with any seriousness anymore in real academic economics. Modern economics is data driven, and the reality is that in order to make this argument like economists in the past have made you need to cherry pick not only your data, but cherry pick your goals. What does it mean to "perform better" why does it matter that the "total available wealth" is lower? You're attempting to use market logic to prove markets, market logic smooths everything into $ and by applying market logic to non-markets you can easily prove it's better by market logic. It's like saying races are the best way to judge vehicle performance.

Not only that but htis is a sociological arugment. Not an economic one. That's why Karl Marx is the father of sociology and not Carl Menger.

> An example might be useful. Consider when California capped retail electricity prices in 2000. Even though this was far from a competitive market to begin with, the result was predictable: shortages. The price caps reduced utilities' incentive to expand production, and simultaneously increased consumers' incentive to use electricity. (There were other factors involved in this debacle, but the price caps were a key feature.)

You didn't actually answer the question. Shortages and market distortions are not the same thing. A shortage is a shortage. A market distortion is in the optimal abstract the inability of our system of value to accommodate for value that isn't speculative. In hindsight a market distortion is the "incorrect" pricing of goods. However practically, all markets are distorted as you concede in your second paragraph that it isn't about finding the optimal price.

You're simply saying market distortions are bad because some market distortions are also shortages. Rectangles are bad because some rectangles are also squares.

> Suppose you're a pencil manufacturer. Of course you can calculate some output price for your pencils that reflects costs + some profit margin. However, we don't know if that output price will incentivize good pencil-purchasing behavior. Perhaps you're the only seller of pencils worldwide, and the price is too low. In this case, people who don't really value pencils buy them anyway, and your inventory is depleted. Now, pencils are sitting unused in random drawers, while there are art classes that have to be canceled because the students can't get the supplies they need. (You've mentioned a need to control distribution, but haven't suggested a way for these distributive decisions to be made.)

I could have stopped reading this paragraph at "we don't know if that output price will incentivize good pencil-purchasing behavior". The only need for pencil purchasing behavior in the case we are talking about the price controls case, is when profit is part of the mix. I've already conceded that price controls and profit are volatile. Price controls are about providing a service, in fact known commodities don't "really" have the issue of nobody wants to buy them. People need pencils. You're talking a lot here about how hard it is to get people to buy pencils AND make an optimal amount selling those pencils. That's simply not the case we are discussing with price controls.

> (You've mentioned a need to control distribution, but haven't suggested a way for these distributive decisions to be made.)

A lot of these are easy for base commodity goods. And as a society we know how much the average person uses pencils / tooth brushes / etc. That's actually what markets are good at, experimenting and collecting data. You can survey people. You can collect information about shortages in real time. This is an inventory problem, these are simple computer models that can solve this.

>Consider also that graphite is an input price. How much should that cost? It's useful for making pencils, but it's also used in nuclear reactors and lithium-ion batteries. If the Department of Homeland Prices is going to choose a good price for graphite, they're going to need to decide how many pencils the world needs, how many nuclear reactors, and how many lithium-ion batteries. Of course, those items feed into other items...

The government in various layers already chooses how much consumption happens. You've hit on one here which you've ironically not commented on. Governments all around the world essentially some to a lesser degree and some to a command economy degree control the distribution and allocation of power plants.

Yeah let's talk about the price of graphite though. The current price of graphite is a speculative price based on what the average buyer is willing to pay for it. Does that price accurately reflect the cost of extracting that graphite? At what scale of extraction does that price reflect the extraction of graphite? How much capital expenses are needed to extract graphite? What happens when the cost of graphite is less than the actual cost of extracting it, but demand does not change? What if the price equilibrium of graphite and all of it's dependent commodities or some other commodity is predicated on slave labor?

In this entire chain someone is getting fucked breathing in graphite fumes and getting compensated pennies for the actual value of their work. This is entirely the problem with how markets are applied, it's making software for software's sake, not making software for people. This is just spinning cubes untethered to the real needs of humans, making numbers go up. You're just playing EVE online IRL.

Seriously EVE Online shows you how you can easily solve this problem. All the data is there and it's actually "open". Even better that EVE ISK doesn't need to feed anyone. You can compute the costs of entire supply chain of EVE very simply. Literally https://evetycoon.com/ solves the very problem (pricing out the whole chain accurately) you're trying to say is a huge unsolvable problem by a singular entity. All you need is the data and the rest of the software is just basic calculations of supply costs and a constraint solver that includes every commodity weighted by demand.

This mystification of capitalism as being a complex beast was simply the woo of a bunch of 20th century men (and a minority of 19th century men -- e.g. Austrian school founders) who were too lazy, too dumb, or didn't have enough tools to cope with the explosion of commodities and production of the second industrial revolution (first industrial revolution for the 19th century guys, and also they were dumb and/or lazy not giving them the tooling doubt -- e.g. Menger and the gang).

This entire line of thinking has been swiftly discredited within the last 30 years in the mainstream because it is not just ideological, it's just plain wrong. It is also a fun house mirror of those it credits to make the claims. The "Invisible Hand" of Adam Smith was a pejorative for a market that dominates the lives of people living under it, not a fantastical near utopia where men are entitled to the sweat of their brow.

[Vt71fcAqt7]

>every subsidy is a form of price control. Price controls are not just ceilings and floors.

You make many points and I didn't read the whole thread bellow but on this point specifically I think you are wrong especially in the context of GP which was saying that price controls are not effective. What GP means is that actual price controls are not effective. So I don't see how redefining price controls here is meaningful. That is, it would not be fair to say, for example, that since things that are "a form of price control," however we define that, are effective, therefore true price controls are also effective. So I don't see why you are trying to redefine this word here. And it is obvious that GP means price ceilings and floors. And, importantly, that's what people mean by the term. For example that is how Wikipedia defines it.[0] Also importantly, that's what the phrase literally means. If you subsidize something, you did not control the price as someone can still charge more for it after subsidies. They just won't choose to due to market forces. Even then if you only subsidize one company then they will not lower prices assuming that the scale effeciency created by more buyers does not provide more profit than keeping the current price. I suppose you can say that since the market force is so strong that the government giving subsidies amounts to literal price control. But this is obviously a very different meaning, and since it is not the common usage it makes no sense to define it that way in this one comment. Additionally, by that same token we would have to define every market action as a form of price control. So my point here is that nobody defines subsidies as price control and it makes no sense to do so from both a linguistic and economic standpoint.

>Also "subsidies don't work", the subsidy often not a consumer subsidy it's a producer profit subsidy. See EV's which all have subsidies built into their price except the Leaf.

I don't know who you're quoting here or what this paragraph is saying. But I didn't see GP say subsidies don't work. And nobody has said that price controls not working amounts to subsidies not working. Subsidies obviously work and have been shown to work for decades. Not in all cases does it work, but many times it has worked and the outcome is one that would most likely not have occurred in a completely free market. And this shouldn't be surprising as using capital to grow a company is one of the main 'discoveries' of Capitalism along with the division of labor. The only issue is that you lose market signals and you have to increase taxes. Government-free markets and Capitalism are not the same thing. To deny this is to say that the East India Company was not a form of Capitalism as it had government mandated monopolies over several markets.

[0] https://en.wikipedia.org/wiki/Price_controls

[_pi]

My usage of price controls in that way is intentional. The average argument against price controls (e.g. price ceiling sand price floors) is like saying knives bad because I can cut my fingers off. Price controls are tool, it's about how you use them.

> Subsidies obviously work and have been shown to work for decades.

Subsidies obviously work and subsidies don't work in the same way that price controls obviously work and price controls don't work.

These are tools.

You're not talking about the application of tools, you're simply talking about ideologically preferential ways to change an economy.

Subsidies are considered good and price controls are considered bad because of how they affect private capital not due to any argument that a rigorous data driven modern application of economics would provide. By modern standards those statements "price controls are bad" and "subsidies are good" and their inverses are unfalsifiable.

[Vt71fcAqt7]

I take back some of what I said about subsidies. This was because of how I read "every subsidy is a form of price control." On reading your post again you are talking more about welfare specifically. I was thinking of subsidies meant as part of industrial policy, but thinking about this more we are talking about welfare. Although this wasn't obvious to me at the time as price controls are also used in industrial policy. And arguably the Apple lawsuit and anti competition law in general is about industrial policy. I should also point out that I never said price controls never work, although I perhaps implied that by saying subsidies do work implying that price controls don't. But that wasn't my point. My point was that you cannot conflate subsidies with price controls because they are not the same. I don't think your usage of price controls being intentional here makes it any better and FWIW it didn't read that way at all to me, it just read like you don't know what you're talking about, especially combined with your usage of "ooga booga free marketers." I don't mean this in an offensive way I'm just trying to explain how your comment read to me.

>Subsidies are considered good and price controls are considered bad because of how they affect private capital not due to any argument that a rigorous data driven modern application of economics would provide.

For industrial policy this is certainly wrong. For welfare which is what I again assume now you are talking about I don't know enough to make a statement on it. I have read that price controls often decrease supply of the product in question. For example in a housing shortage price controls on rent decrease the number of new apartments built. Price controls make sense when the market in question is monopolized by a single company like in the case of utility companies. Generally these monopolies are given by the government and can be thought of as contractors for the government in the market in question.