[bawolff]

There is a reason this doesn't work in general though.

If you bought up all the food, farmers would raise prices until either you couldn't afford to do that anymore or eventually there is a splurge of new farmers taking advantage of all your free money until you run out of money. It could maybe work in times of famine where the government introduces price controls or rationing; it does not work in normal times.

For black markets (which is essentially what scalping is) to work, there has to be some shortage of a good that is priced artificially low. It works with concerts because singers can only sing so much but they also don't want to make the concert so unaffordable that only millionaires can go. There are very few situations like that. In most industries you would just increase prices until supply equals demand.

[Brendinooo]

This makes sense, but I'd contend it's all the more reason for outrage: not only are scalpers doing what they're doing anyways, but they're destroying the (totally legitimate and sympathetic!) reason for "artificially" lowering the price to begin with.

I should note that outrage doesn't seem to land on the people who buy from scalpers, which is...probably correct? Seems easier to say "don't break the contract" to scalpers instead of fans who are just able to pay more.

[pixl97]

Onion futures act.

This is the reason that businesses don't try to monopolize the food industry. It's not competition as we just saw from the egg industry. The government gets pushed back from the masses pretty quickly on food related issues.

[bawolff]

Yes, although i would argue that a cartel suppressing supply is a different mechanism than what is happening with scalpers.

The onion futures thing is kind of interesting, because it was essentially the opposite of a scalper - they didn't try and buy all the onions to make price go up, they did it to crash the price of onions so that their short positions would pay off. Still a fair counter example to the idea that the market would self correct by itself.

People not trying to monopolize the food industry is a bit of an american centric view, e.g. Canada had a government mandated wheat monopsony for a long time. I think australia had something similar. I'm sure there are plenty of historical food monopolies. They of course couldn't be too greedy or its off with their head.

[gruez]

>This is the reason that businesses don't try to monopolize the food industry. It's not competition as we just saw from the egg industry. The government gets pushed back from the masses pretty quickly on food related issues.

But you provided your own counterexample with eggs?

[pixl97]

Note they didn't monopolize it, so I guess that was correct. They did form a cartel that did cause a lot of political issues, and if we had a functioning government would have been a very risky bet.

[ozgrakkurt]

I really doubt you can’t buy the whole harvest of a farmer if you pay for the whole thing. You can probably buy it for less than normal

[bawolff]

But how much less then normal.

Like the logic here is the scalper company buys all the crops and then resells at an exorbitant mark up because everyone needs to eat, but then the market price becomes what the scalper is selling for. Would the farmer really leave that much on the table? They may be willing to give some discount to sell all at once, but there comes a point where it is no longer worth it to them to do so. The whole scalping thing only works if you can buy low sell high, but if you sell high the people you are buying from will start to notice that they too can sell higher to other people.

Concerts are different because there are brand reasons to keep prices low. Farmers aren't a charity, they aren't going to sell significantly below market price just for the good vibes.

[ozgrakkurt]

There is a case where farmers don't have the power to fight against big corporations. One example in US that I know of is roundup pesticide issue.

This makes me think that it is possible for corporations to suppress the price on the farmer side and fix it on the consumer side.

This happened to at least some crops in Turkey in the past, for example farmers were selling hazelnut for 15TRY/kg and you could only buy it for 100TRY/kg in big cities. Farmers were actually complaining that they couldn't even make a profit from growing hazelnut.

Corporations would like to do this with even water if given the chance as Nestle CEO was saying himself in a famous video.

So they would for example do it with bread and starve people in the process if it means they can make money. And I think that they could easily do this for example in US if they didn't correctly fear that people would force the goverment to smash them.

Also the selling format doesn't have to be the crop itself. For example they make nutella from hazelnut. So farmers can't associate it directly with their selling price even though it is obvious that they are getting shafted.

Another possibility is the farmer selling 80% to the corporation for the normal price and then selling the rest at a massive markup so both profit. Same thing that is happening with ram manufacturers. Then the whole thing is justified as free market and only the consumers get hurt because in the end you have to buy RAM. Or equally the corporation could pay the farmer a 20% bonus and still make 80% extra profit on end consumer. Farmer might not object if the scheme is dependant on the corporation.