Awesome as usual. Can‘t wait for the follow up. Please make sure to include the all time interventionist favourite of „positive externalities“, which has become somewhat of a mantra for those advocating in favour of more intervention.
Definitely one of my favourite explanations of the danger of price controls. What do you think Austrian economists would say about a government subsidizing essential goods rather than imposing a maximum price on them?
Subsidies tend to increase the supply and demand of a good as well as decrease the price. So if you think that some goods are undersupplied, a subsidy can be the solution.
Its not that easy as described. In countries with huge ammount of monopolists there will be no other way then to buy for their preset prices or not to buy at all. If the question to buy a loaf of bread, a bucket of milk or not to buy, then there is no question, the answer is to buy, because you have to eat something and without preset minimum controlled prices or in other words a subsidized prices, there will be no option for poor people to have their meal. The only drawback is that other layers of society will pay for the controlled prices via taxes, but problem in such case is not a controlled prices, rather monopolists and oligopolists...
It hurts the public because both the producer and the consumer (government) are unconstrained in a minimum price environment. Taxes have to rise to satisfy their profligate expenditure of public funds.
The whole Problem with this theory is that the goods don’t go to the people who value it the most, but to the people that can afford it the most. That is okay when we are talking about luxury goods. But when it comes to essential goods, like oil, which is a problem we have right now, everyone values it equally, but not everyone has the means to pay. So price controlling plus rationing is imo the better option than leaving the market to itself because that would only, as always, favor the upper class.
but wouldn’t the introduction of a price limit on a commodity such as oil make it unattainable to many countries from predatory markets like Saudi Arabia, or Russia? Furthermore it would make every company adopt the absolute market cap to just earn any type of profit. It would also negatively effect the lower class as the already expensive and scarce commodity such as oil an even more expensive purchase. A solution to this would be to only drill in America (or wherever you live) to negate the price of imports and trading with nations like Saudi Arabia and Russia. However this would make international trade of oil impossible as each country would have different market caps. IMO the government needs to stay out of the market and encourage more competition like when the US govt broke up Standard Oil, or the steel monopolies to drive prices down as different sources are created.
Wrong. Price controls on even basic items always result in reduced purchasing power for everyone. Production in any given product falls because profit margins for producers shrink, while the cost of goods to produce the price-protected product rises, due to increased demand price controls create. This creates the need for the government to subsidize the market of the price-controlled product and anyone with a brain knows the government has exactly ZERO excess money to throw towards subsidies. This results in increased taxes on the public, which reduces purchasing power relative to each person's income, which is the EXACT same outcome if price controls were never implemented.
The discussion of the minimum wages forgets something very important. He always mentions how minimum wages produce unemployment, totally forgetting that employment is worth shit if you can’t satisfy basic needs because your wage is so low. So minimum wages plus welfare for the unemployed seems to be the far better option for the worker.
but the problem is that minimum wage needs to be reasonable to the rate of inflation so the employer can continue to pay for the workers. Furthermore a bolstered minimum wage that doesn’t keep up with inflation creates the problems with goods/services being more expensive/unattainable than they were when the minimum wage/ inflation was lower. Minimum wage shouldn’t benefit the worker or the employer it has to be equally beneficial.
@@plasmorarca1044 no it’s first of all to make sure that working people don’t live in dirt and that’s what it should do. It explicitly should benefit the worker. We wouldnt need a minimum wage if the market created the outcome that every worker gets enough wage to live.
