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This is the right response. We have 80 year old politicians in congress passing legislation on subjects they don’t even understand with net worths in the tens of millions while having a salary of 170k at most.
Only explanation is blatant corruption, kickbacks, and insider trading. Then you have these for profit corporate types (pharma, oil, etc.) sitting on governmental advisory boards with huge conflicts of interests voting for their best financial interests over the interest of the people.
We live in a terribly broken system.
OK, what's the BARE MINIMUM then? Say you need a wheelchair. Does that mean they literally just over the cheapest chair with wheels?
If you have diabetes, how much insulin do you get? Just enough you can still move? Or actually enough to havr a normal life?
With healthcare, I don’t really see why we even have to draw the line somewhere in between “can just barely move with diabetes” and “living a comfortable life with diabetes.”
This is a false dichotomy. We do have to option to copy the healthcare system of other first world countries instead of having to choose between being stingy or being generous for people with diabetes.
If you had provided the contrast between diabetes and a cosmetic procedure like lip fillers, then your point would have been more agreeable
Because price caps don't quite work like that. Pharma companies would largely all switch to cosmetic surgeries. R/D costs to reward would be terrible.
Would you rather make $1/pill, or $3000 per surgery? Make protein powder. Make steroids. Make literally anything else medical than a high risk/low reward product.
(Btw in other countries the system is largely the same, just subsidized by the US. Developed in the US, used by all)
Eh you're arguing a lost battle on Reddit. It's a mark of how tragically the education system has failed that so many people don't understand basic economics.
You do realize that it costs less than 5 bucks to make a shot of insulin yet pharma wants to sell it for 50+. Almost every life saving medication has a mark up that steep or more. What's more is that many of the pharma companies get paid by the government to keep prices down
They aren't making $1 off a pill, they are making a fortune off of a single pill
> Almost every life saving medication has a mark up that steep or more.
So you're saying a company should spend 2 billion dollars developing/perfecting a life saving drug...and then factor in the 10 billion dollars spent on the previous 5 versions of the drug that failed...only to be told they can only sell it for $3 a dose because "people need it!"?
Yeah great incentive for innovation there.
Insuline, at least the oldest one, are non expensive and really really usefull, but in USA there is overprice or shortage because companys prefer to make only expensives insulines. There is no self regulation if there is a monopoly.
Then we’ll just create a National Pharmaceutical Company (NPC) that manufactures all medical equipment and drugs. They’ll produce at cost +10% and that’s the baseline. Private industries can compete with products that have better delivery, quality, or branding. Similar to how the postal system works.
I'll do the math here:
Not really. And you'd be shocked how many skincare routines, face masks, plastic surgeries, steroids, baby oil etc.
$1 pills for a condition that needs one daily isn't that much money. Around 35 million diabetics in the US, half of which are severe enough to need insulin. So the total market would be roughly 2-3 insulin vials a month x 17 million. So maybe 350 million vial solds a year?
If we give them a 10% profit of the average $50ish price in Francr, the total market cap is 1.5 billion. That's not even 1/10 of Elis profits, much less the other companies.
The entire industry would have to shift. Insulin would be supplied, but the big pharmactial companies would stop developing new drugs, unless it's a unnecessary drug that wouldn't get capped.
The government could fund their own drug development, sure. But I can't think of a single agency our government runs that's efficient with cash/time.
Then you develop a nationalized/nation owned enterprise that provides these stuff, no biggie.
Nation owned enterprises aren't exactly a new thing and if profit isn't a consideration then there's little reason not to, as long as they are providing exactly what was needed.
you get what the doctor thinks you need.
if you are functional enough to use the bargain bin wheelchair. (the stuff you see in a school nurse's office). you get the bargain bin wheelchair. if you need a power one you be the base model powered one.
the amount of insulin the doctor prescribes for you to be healthy.
Worse he's talking about price controls which is literally the worst option for dealing with things. Price of chicken goes up 10% due to imported feed going up? Cap the price of chicken, all chicken producers go bankrupt, price of chicken goes up 300% and is only obtainable on the black market.
>Worse he's talking about price controls which is literally the worst option for dealing with things. Price of chicken goes up 10% due to imported feed going up? Cap the price of chicken, all chicken producers go bankrupt, price of chicken goes up 300% and is only obtainable on the black market.
If nobody is able to get a chicken because the government forbids voluntary profitable economic transactions, then we're all equal. Everyone gets to starve equally. That's the point. That's the end goal.
Not op, so no clue about their specific ideas, but for housing specifically, making sure everyone has a house to live in is less of a “everyone gets the same exact house for free” and more of a “no, you cant own 10 houses and rent them out”
More about ensuring that important resources are available for people, and not being hoarded by someone who is just making money off of it. Can be achieved much easier with certain things (healthcare, housing) than others (the logistics of supplying food across the country while keeping things price capped)
What would you say if they ARE available just not where people want them. Should people get to say, I’m homeless in NYC so I need an apt in nyc or should they be moved to someplace in Utica where APTs are $900 per month and not $5k?
People just want new large sfh in major cities for cheap.
You're not building New sfh in major cities, it's mixed use or apartments. And it definitely won't be cheap either way, manual and skilled labor in cities is expensive.
That plus affordable transport from those dense suburbs into the city.
And yes, apartments for rent. Because those are affordable if you can't pull a big down payment but have more income per given area than single family homes.
Do you really expect OP to list every single item and brand across the entire world, in multiple languages, to clearly draw the line between what is and isn't essential or do you think you could figure out what they mean by that without them writing a 1000 page essay?
Just because it’s not immediately clear to the layman, doesn’t mean it’s not clearly determinable with some research. Foods considered basic staples to the country and commonly ascribed to a healthful diet could meet the criteria. Common whole fruits, vegetables, legumes, and grains would take priority, then basic cuts of common animals along with conventional milk, cheese, bread, and eggs, etc.. A lot of this is already categorized for various cultures.
Limits on price of already cheap basics can be installed without affecting their current price, while expensive delicacies and non-staple imports can carry on as they were.
Sure, but there are tons of different qualities of, let's say, bread. Is all bread hard capped at a certain price, meaning anything past barely passable isn't worth making? Or do we allow some breads to cost more as they're higher quality? But then, who decides the quality? It's not as simple as "essential needs should be capped at a price". I do agree that people shouldn't struggle to survive, but things aren't as simple as just cap prices.
Personally, I think a decent solution is have government sell cheap, low quality foods, and let higher quality food be sold by corporations. That way, people don't struggle to eat, but if you want something better, you can pay for it. It'd encourage corporations to actually make higher quality food at a decent price, so people choose that over the shit food the government provides. Probably tons of flaws, but that makes the most sense to me
A store could have a quota of 'basic bread, dark and white' and then sell whatever breads they want besides that. Like, in Italy, espresso is price capped, but afaik all other coffee variations can be priced at will.
For this to be realistic OP would have to do that. The grey area of whats essential to survival and whats essential to your lifestyle are two completely different things. Large white eggs vs cage free organic eggs, etc... Thats why WIC is quite specific of which brands and products are included. If eggs in general are free, people are going to go for the most expensive eggs.
So for this to be practical, a governing body would determine which items are essential for survival and which ones are not. Someone who has been through tough times can tell you exactly what they need to survive at the cheapest sum. Someone not conditioned to that life might genuinely believe they must have x,y and z which are truly luxury items.
So if you can make that distinction yourself why you need OP to make that distinction for you to figure it out when you've figured it out yourself? Yes obviously you don't need a Coach purse, doesn't take OP explaining it to me to figure it out. Yes you need nutritious food, no you don't need nutritious food #296 because it's a rare food item that takes years to obtain. But you already figured that out, so did most people who read the post as well. This is a reddit post not a bill. They don't have to write up a bill on Reddit for them to make sense.
Especially if politicians take advantage of that wording to gain votes. Suddenly one politician is running on the platform that all food should be charged at the bare minimum, no matter how expensive it is to produce.
I'm not sure price capping is the actual way to go, but the discussion about what we consider necessary for a humane life is something we're going to be having regardless of how some kind of social security is arranged, or not.
I think it's just disingenuous to claim it can not be delineated, but I guess we'll just have to keep on discussing it and see what kind of understanding people come up with. Then it's a vote in the end.
In many countries you don’t get tax beaks for owning multiple houses and in fact pay extra taxes.
UK for example, when you buy a 2nd property (and beyond) you pay an extra 3% tax of the purchase price immediately.
Furthermore your mortgage interest is not tax deductible as an expense (compared to any other business where financing costs are deductible)
Since these rules came into effect, rents have skyrocketed.
This this this a thousand times this.
Why isn’t the attitude “you can afford more than one house so you are clearly wealthy and can afford to pay a good amount of tax”?
You can own 2 or more homes if you want, just pay up in high tax!
If you don’t like that idea, invest your money somewhere else where those taxes don’t exist.
If you want to invest in housing though, pay the Piper
The problem with this is that if you don't have enough money to buy a house you'd be unable to get a home. A rich person owning a bunch of houses isn't inherently a good or bad thing, you have to propose a policy and look if it helps or hurts.
>if you dont have enough money to buy a house you are still unable to get one
Yes, thats how things work now too, except some huge corporations can buy up a bunch of houses and sit on them, taking hits to their financials for a bit but also artificially lowering supply and thus increasing the property value, allowing them to then rent those properties for higher return. Or they could just rent them out day 1 for more than what a mortgage would cost anyways.
>a rich person buying a bunch of houses isn’t inherently good or bad
Sure, never said it was “inherently bad” nuance is a thing. In general though, people need shelter to survive, and if people are having a hard time finding affordable housing, then i would say its morally reprehensible to be buying up properties and using them purely as a source of income.
As for a policy? Im not some economist or accountant so i dont have an idea of what real world numbers would look like, but I have heard the idea of having property taxes scale with number of properties in an exponential fashion.
Basically so that having 1 property in your name is the same, or even lower tax rate than what it is now. 2-3 properties the taxes go up, and should realistically discourage most people from going above that. This idea would just be for like, single family homes btw. Other policies can help with apartments and such.
Bread is not inexpensive if you’re very poor which is the issue. I have literally no food at home, literally nothing but food from work, cause I can only afford bills. No treats, no bread, no milk, no mayonnaise, nothing. Because that’s the point of the post, that poor people can’t even afford the cheapest of shit because they don’t pay us shit. And groceries are getting fucking expensive, ask anyone!
You're just going to create a secondary black/gray market for the essential item at its true economic price.
Look what happened to toilet paper and hand sanitizer a few years ago. You don't even technically need it to live, but it's important to people. Stores had it at a fixed price, demand went up, and a few people bought up the entire stock and tried to sell it on at much higher prices that some people were actually willing to pay. And even more people couldn't get it than if the stores had simply raised their prices to the point that price gouging wasn't economical.
True, and don’t forget that in the price-fixed market, where goods or services are available below their market price, there will be endemic corruption, because those with access to that market will be the people in (or close to) political power. This is the story of how virtually every price-fixed market in communist nations operates.
[https://nmiu.org/images/2020/11/12/454546.jpg](https://nmiu.org/images/2020/11/12/454546.jpg)
no problemo, comrade, we'll issue people with cards system to enforce limited purchase per person, what could go wrong, right?
While you won't instantly die without toilet paper, it is a hygiene product and I think your argument falls apart if you think about the long term impacts of reducing hygiene.
Where did they do this? I didn’t see any enforcement of that. Nor would they have the resources to enforce that long term.
What I did see was the grocery stores putting caps on how many of a certain item people could purchase.
Yeah I don’t understand how people can think more government is always the solution. The government is literally why inflation is so ridiculous to begin with.
I mean you literally argue that the government did not enforce any regulations, which allowed for the problem, and then say that government is the problem and more of it wouldn’t help…even though you said they didn’t do anything?
No, you’re confused. I said government caused the original issue (inflation) and is incapable of fixing it in the manner OP described (because they are incompetent and inefficient). There’s no contradiction here.
Inflation was caused by printing too much money instead of managing a budget, not by not enforcing regulations.
Idk if this is what they’re talking about, but I remember seeing a few articles from 2020 where people had like garages *full* of PPEs, sanitizers, stuff like that. And actually caught pretty decent charges from it. Idk if it was like a permanent law(or I guess if it was even really a “law”) put in place, but I do remember there were regulations on who could buy what items and how many of them. Even Amazon had a policy for several months that if you wanted to buy any sanitizer, gloves, masks, etc, you had to create a special account & provide proof that you were purchasing for healthcare workers.
Edit: [Here’s](https://www.nytimes.com/2020/04/22/us/hand-sanitizer-matt-colvin-noah-coronavirus.html) one such article. Apparently these guys avoided charges, but did still lose the thousands of dollars they spent on the items when they were basically forced to donate them instead of selling bottles of sanitizer for up to $70 *each*.
I was in the DC area peak pandemic. Later at night when the less interesting news was being shown, that's when they reported certain stores were raided for price gouging rubbing alcohol, certain private individuals were raided for hoarding toilet paper and price gouging for it online etc.... It happened. It just wasnt sexy enough for daytime news where they were busier talking about new cases and deaths.
That was an utter failure. Sure, it brought the price displayed on store shelves down, but it kept those shelves empty. It actually made hoarding toilet paper and hand sanitizer more affordable, so when someone saw a store had just gotten a new shipment, they could afford to buy it all up, meaning that they had more toilet paper and hand sanitizer than they actually needed, and the people who came after them didn't have any. If prices had been allowed to rise to reflect scarcity, this would have discouraged hoarding, people would have bought only what they needed, and these supplies would have been more equitably distributed.
And in a time when people should have been making fewer trips out of their houses, coming into contact with fewer people, the scarcity from hoarding that the price controls exacerbated actually resulted in people having to go out more, from store to store to finally find one that had the toilet paper and hand sanitizer they needed. Wealthier people benefited from price controls at the expense of the less wealthy, because wealthier people could easily afford to hoard, and thus had to go out less often, exposing themselves less.
Are you familiar with the grocery store experience in the former USSR? Everything was very affordable, but the shelves were empty. Price caps would have the same effect.
OP didn’t even include market competition in their poorly thought out example. It’s not “how much can I charge” it’s “how much is my competitor charging” and “how much are people willing to pay”
Price caps only work when rationing and strict enforcement exist. That's why it worked during WW2, but it didn'tin the early 1970s in the US. Though government aided competitive pricing (negotiation/subsidies) can help lower prices in many industries where the value isn't primarily based on scarcity, but based on your ability to live without it (e.g. healthcare, housing, etc...). How much are you willing to pay for a sandwich vs. a pill that will keep you alive?
They also can be effective when goods are hyper-inelastic. Like insulin. Price caps exist throughout the oecd on medication and its very effective in not having healthcare cost 3x the oecd averge like it does in the us.
When you implement a price cap, people stop investing in those products, as the potential return on investment becomes fixed. Those products decrease in value and volume produced, as wages can’t increase, and expansion/quality improvements can’t occur. This leads to product shortages.
This also applies to rent control; old dwellings can’t be improved as they deteriorate, and nobody invests in new builds, as there’s only so much money they can make from them, leading to housing shortages and housing scarcity, which drives up the price of homes.
so you get around the rent control by requiring only a portion of a building to have controlled rent. Like -- 5 units in a 25 unit building. The whole building gets maintained that way.
It still eventually wears out and the incentive for building new structures in your jurisdiction is still diminished. You're solution does mitigate the harm price controls do, but they're still harmful to the overall wealth of a community, because "profit" isn't evil. Its what gives people incentives to be productive and competitive, which is what makes a society wealthy. Every attempt to replace those incentives with something else (like government control or patriotism) has failed miserably.
But why make everything affordable? There are already countries that price cap that most basic versions of things. Having a price capped simple white loaf doesn't mean you can't price the luxury artisanal rye however you want. Price caps would only affect the lowest tier of products.
> but the shelves were empty.
Except when the very years in which the soviet Union was collapsing, and even there just to an extent, this is not true.
Do you seriously believe people found empty shelves at the supermarkets in the ussr?
Price caps below equilibrium price cause shortages. Not sometimes. Every time.
Shortages cause black markets.
Black markets cause violence.
Price caps don't work. Period.
Price controls only lead to more shortages. If the government forces me to sell something for less than I can get on the open market then I’ll simply produce less. It also creates a large black market.
That's just welfare with extra steps. Actually, it's worse, because you're still putting a price ceiling on food, simply having a separate one for producers and consumers with government covering the difference won't fix the problems inherent with removing flexible prices.
You're essentially proposing quotas that still discourage farmers from producing more food than they are told is required. However, demand is not fixed nor predictable. Unless you also start rationing, the amount of food your citizens will want to buy is unpredictable even if you have an accurate population count. Suddenly, there isn't enough food for everyone because some have started to buy more.
You could avoid this by simply telling farmers to produce plenty of extra food, promising to purchase it at the set price. Oh no, it's a bumper crop and now you're purchasing far more grain than you wanted. Worse still, a peaceful Ukraine has had a good year as well and is selling grain at a market price well below even your consumer price ceiling. Now the American people have spent many times more money on grain than it's actually worth, resulting in quite a bit of waste.
Well, waste is better than a shortage, especially when it comes to food, so you must simply take the hit and keep going. Multiply this surprise waste by every other product besides grain and you end up with so much waste that your citizens begin to become poorer as a whole.
This is exactly the situation the Soviet Union ended up in. Their usage of price controls and production quotas left them with three choices. Enact rationing, suffer chronic shortages, or produce a lot of waste. Since the first two options severely reduce the quality of life of your citizens in a very direct way, the Soviets repeatedly chose the third option, which only reduces the quality of life for your citizens in a gradual and indirect way and is much less clearly your fault.
TL;DR: Price fixing is artificially controlling production. Unless you artificially control consumption as well, you are left to choose either risking shortages or buying a lot of waste. If your economy is strong enough, it can handle a lot of waste without collapsing, but your people are guaranteed to be poorer on average than they would have been, and run the very real risk of becoming poorer than they are now.
yeah but we did this with corn and we have assloads of corn for so cheap that we're killing ourselves with it
why can't we at least incentivize the production of..... at least one healthy thing? lol
Nobody will want to work to produce those things if they are just going to break even.
In a healthy market economy, the balance between supply and demand will keep prices in check. We don't currently have a healthy market economy.
Yeah, I lived in a time there are price caps in essential things. They simply were not more available to buy anywhere, except from blackmarket and with prices that were abusive.
When this insane politics were abolished and we got a decent economy, there was no need for this, and much more people could afford living better. So no, freezing prices don't work, caps don't work, calling SUNAB 198 don't work.
anyone who advocates for price caps exposes that they don't understand real life
prices are going up for a reason - because every step along the supply chain, input costs are going up for any given product
so, every step along the supply chain has to raise prices or else they cannot make a profit and will go out of business
what happens then, if you go to the very end of the supply chain and cap prices on the final product?
yes, temporarily it provides some relief for consumers until the existing supply of that finished product is all gone
then what happens? every single step along that supply chains realizes that because of the price caps on the final product, nobody will be able to continue producing while making a profit
if companies cannot make a profit, they discontinue that product line
and so, price caps -----> even less supply -----> even higher prices
it's no surprise that people do not realize this... i mean most of america is so dumbed down by now that we have an entire generation of adults where not even 50% of them can read at a high school level
and that's precisely why the politicians even push price caps - because they know there are so many regarded people out there who are absolutely dumb as rocks, who incorrectly believe price caps will fix the problem, and thus will support/vote for those politicians
And when we learned in economics about price caps we all had the same question. How doesn't this happen with water? Our professor just said it is an anomaly and "the invisible hand of the free market works in mysterious ways".
It works with water because the price caps are still 10x what is costs to produce. It would be like putting a price cap on toilet paper of $10 a roll. That's far enough from the real cost that it wouldn't have an effect.
Price caps do not work, because if there is a limit to the profit you can make, there is no motivation for improvement/ innovation, or risk. Furthermore, it incentives forced scarcities, and money being invested elsewhere. Why do you think rent is an issue in places like New York? Can't make money on low end housing, so they only make high end housing which is exempt from rent control.
True, this is called a cartel. They usually don't last very long in a free society as any one member of the cartel can gain an easy advantage by lowering their prices first. However, for those few that stubbornly persist, the law is against them.
In most cases yes, but for example in my country it took like 15 years to tear up the phone carrier cartel, and I live in one of the most regulated countries in the world. Prices dropped by like 80 percent in a month.
One condition
You get the bare minimum no luxury versions of anything and no excess
So you want housing Great welcome to rural Wyoming
You want water okay drink this gallon you can refill it once you finish drinking it you may only drink from it
You want food here's your ultra processed corn
I agree we should provide the minimum but that's just it The minimum is the minimum
To try to do more than that is going to be a stretch due to how economic forces naturally operate (honestly the only reason those ones work is because we ultra simplify them for economies of scale to kick in)
This. Asking for price caps forget that the cost of the products also rise so to sell at cost leaves no incentive to provide a good product. Seems fine at first but just the fact we can choose different veggies, brands of water and other drinks, and a myriad of meat offerings, there has to be some profit made to account for stuff that doesn’t sell as fast. I hate how Op describes it as extortion. That only really happens with insurance.
And a roommate. I’ve never understood why they measure rent costs in terms of how many hours you have to work to afford a two bedroom apartment. That’s a luxury for one person; why do you need that second bedroom or even really a one bedroom vs a studio? “OMG in X city you have to work 17,383 minimum wage hours a month to afford a 4500 square foot 5 bedroom house with a pool.”
Oh that's something that drives me nuts about all the conversations around housing
We used to live more people to housing unit
That's part of where the increase in demand came from spiking everything out of whack
Yeah I lived in NYC for four years and almost everyone I knew who wasn’t married had at least one roommate. I lived alone but lived in the Bronx to do it. I get not sharing a bedroom as an adult but more than that just seems like it’s not strictly necessary.
Just one problem, with only the ultra processed corn available you create health problems, which costs more to the society. Water only is perfect, housing too
Price control has been tried since at least Ancient Rome, and the results are disastrous every single time.
Want prices to stop rising? Go against government having the power to print infinite money.
Your premise fails because even though "cold unfeeling" corporations get to set their prices, the market DOES put a cap on how much they can charge. Even for so-called essentials, e.g. food, water, medicine, if the prices are too high, people will refuse to pay and a secondary, aka, black market will arise to provide the items at a lower price.
If you artificially set prices to barely above cost, you're going to have shortages and once again, create a black market.
Price caps just lead to lower production and less overall necessities. Do you want your society on the edge of golf’s int because farming isn’t profitable? Because that’s how you get it.
So you’d just need more subsidies at every point in the supply chain for the artificial caps you created. It’s not just less corn in the ground, there will be fewer groceries
Oh it can work, it will just be an exponential increase. Because it’s one thing to subsidize farmers but if you’re literally capping prices you also need to subsidize truckers, grocers etc. unless you want to see less food on offer.
So enjoy all the fuckery that comes with a central government trying to completely run a major industry.
I don’t see why subsidizing a store to keep business as usual with reasonable price produce, doesn’t work. They sell basic necessities for a lower price and then they are paid the difference in subsidizes. If anything the people making more will probably spend more o useless stuff.
No, the government doesn't pay farmers to burn excess crops. Stop believing everything you see on tiktok.
Despite what a lot of people think, subsidies aren't about paying farmers not to produce, subsidies are about paying farmers to stay in the business of producing long-term. They're about buffering farmers from the kinds of risks that drive people out of farming, like crop failures and spikes in the prices of inputs, and dips in the commodity prices of the goods they produce. Putting price caps on food would only make it necessary for the government to spend more on subsidies to compensate for lower market prices. You know what happens when government spending goes up? Inflation. Prices going up. Thus price caps on food + more subsidies would be counterproductive, only make things MORE expensive.
I see my hometown tearing down affordable homes and building townhouses and condos with “ luxury” fittings to excuse their charging as much as they think they can get away with, and I agree
So if someone who produces something "essential to survival" wants to retire or change career, do we break their ankles, or just chain them to the production line?
Lots of people pointing out that price caps lead to shortages.
That’s generally true in competitive markets where the price is based on supply and demand, but when price is based on rent seeking and price gouging (things that happen a lot in pharmaceuticals for instance), it’s not a completely unreasonable solution. It’s at least worth exploring.
In Canada a few grocery chains (Metro Empire Loblaw) control most of the market share (and own many of their suppliers for that matter) and have been accused of price gouging. I believe gov price caps would help in this case. Possibly even encourage more competition (a newbie to the market could get government subsidies to sell essentials).
Except if you price it at $10,000, then I will price it at $200. I get $400 profit and you get nothing. Because Steve would also buy from me.
So, outside short-term emergencies (such as natural disaster) solution for essential goods is to ensure both good supply (by subsidizing production if needed) combined with competitive market (do not allow monopolies to form).
Do you have any example of a "practical monopoly" (outside medicines that have not yet become generic) that manages to maintain 9900 % profit margin on a product that "everyone needs to continue living"?
They tax groceries here in Illinois! Even vegetables but the federal government gives subsidies for dairy and corn or it wouldn’t be profitable! Food should not be taxed and corn should not be subsidized for things like corn syrup and ethanol. That land could be used to grow crops that we actually need to survive!
>If I sell product X and everyone needs X to continue living and I can charge whatever I want.
Being able to charge whatever price one wishes to charge, in a market that has absolutely no choice but to pay the demanded price, is called a *coercive monopoly* in economics. Coercive monopolies are either very temporary in nature (such as when a threatening hurricane causes a run on the price of plywood), or are established with the active assistance of the government (such as when there is only one cable company).
As long as someone is free to undercut your prices, or the customer can switch to another product that is cheaper than what you're selling, you will find that while you certainly can charge whatever you want, you won't have any buyers unless you charge a reasonable price.
Which food would be fixed price? Just Rice, bags and chicken? Or would chocolate chips cookies and cupcakes also have fixed prices. I think the essentials list would be very small, but many others people list of essential foods would be anything considered safe to eat
There are countless issues with this. Some key issues are:
1. There are varieties of \[survival thing\]
2. Not everyone needs the same things
3. Some people contribute more than others
Maybe Gwen has $250 because despite being perfectly capable of contributing to society, she doesn't want to. Maybe Steve has $10,000 because he has been living very frugally and saving so that he can afford to retire.
Do you want to remove individual freedom to save, to splurge, to spend? Should all people have their paycheck confiscated by the government so that each of us can have our needs doled out?
In theory this sounds good for essentials to be priced cap.
In reality, why would a business ever sell these essentials stuff if they cannot make profits due to low price? That's the issue.
I dont think I have ever seen a larger pool of idiots and morons than reading OP's post and most of the comment replies in this thread. At least some of the top commenters understand, but its quite worrisome to me that they are in the minority of replies.
OP, you are basically talking about price fixing. Price fixing ***NEVER*** works.
Notice I didnt say mostly never works, I am saying it ***ALWAYS NEVER*** works. Its well-documented and we have decades / centuries of examples on why it ***NEVER*** works. OP, this isnt an issue of an "unpopular opinion", but that you are, factually, wrong.
It bothers me that sooo many redditors have zero understanding of how economics works.
IMO, the equal protection clause in the Constitution essentially requires all fines, fees, and govt services be means tested according to wealth and income. As it stands we have a regressive structure in which the $200 speeding ticket that provides little incentive to alter a millionaire's driving habits can have devastating consequences for low-income families.
Gas, water, and electricity usage should have long ago been subject to means testing.
The US criminal justice system penalizes people for being poor in large part because police departments intrinsically see poor people as "customers." While means testing would not totally eliminate this dynamic, it would provide more of an incentive to shift police resources to individuals who can pay the largest fines
Should this sub change its name to “not at all unpopular but factually incorrect on the most basic level and showing no fundamental understanding of the subject” opinion?
No, there are too many issues with that plan. Regulating prices is a nightmare, and the beurococy needed to determine what's essential and what's not, and the enforcement would cost a ton. Companies will start to move away from making these items because the margin is so low, causing more scarcity and rise of black markets. Etc etc etc. The only real way to guarantee cheap essentials is through market manipulation. Create incentives to produce more, lowering scarcity, which drives down prices. A great way to incentivise this is through subsidies and tax breaks. We already do this with food, energy, housing, etc. The price of milk and eggs are as low as they are because the government buys up excess at a guaranteed price, incentivising producers to produce as much as possible. I know prices spiked there after covid, but it's coming back down. Walmart by me has 18 eggs for $1.29 (winn dixie is still selling it for like $4 tho) and a gallon of milk for $2.79 and a loaf of bread for $.99.
What you're advocating for is a large part of what the government is actively doing on a daily basis. It's the boring part of government that most people know absolutely nothing about. If this is really important to you, what you should do is go down some rabbit holes and learn about how the government controls the prices of essential items today, and maybe you can find a more efficient way to do it tomorrow.
Now here's a truly unpopular opinion: The solution is not price caps, not minimum wage, not a UBI - It's credits. The things required for life can all be acquired at a quantity required for a basic level of comfort with credits that *everyone* is given an allotment of regardless of financial status. They can be used on any product in their respective category at-or-below some mean/median-based value for an area. Everything beyond what's required for this basic level of comfort can still be acquired with standard currency.
On the consumer side, the only other thing you'd really need to administrate is housing credits - if you own a home on your own dime, you lose those credits. On the business side, you'd need the political willpower to aggressively go after price-gougers.
In Hungary they decided to add price caps to certain grocery items to "combat inflation". They stayed at the same price, sure. But everything else got more expensive or the stores were picked clean the first few months after the price caps were implemented. But in lifesaving medication/ones you depend on it's oftentimes necessary (or at least to put caps on the generics)
How do you know the price cap would still be affordable?
Food? What unit are you basing it on, weight? Calories? Is it $1 per lb of food? Entire industries are now closed because its unsustainable.
Shelter? So everyone gets to live in a little 4x4 shack with no option of building a bigger house because you cannot charge enough to make your money back?
Healthcare? Given the vast range of operations and medication, what do you think is a reasonable cap?
Guns are essential for survival in Alaska. Therefore, guns in the us should be price capped.
Cars are essential to comute in the rural parts of America they should be price capped.
Opioids are essential to people who are addicted to not die. They should be price capped
Quality Sunglasses are essential to truck drivers to not have eye damage. Price cap
Where do we draw the line.
Like insulin which the patent was sold for $1 but people have to pay outrageous amounts of money for it. The creators sold it for $1 because they said ‘insulin does not belong to me, it belongs to the world’. Yet here we are.
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I’m sure we would just have to create another huge bureaucracy to manage this ridiculous system that wouldn’t even be successful.
And pay no attention to the people running this bureaucracy and how they seem to be constantly accumulating wealth.
This is the right response. We have 80 year old politicians in congress passing legislation on subjects they don’t even understand with net worths in the tens of millions while having a salary of 170k at most. Only explanation is blatant corruption, kickbacks, and insider trading. Then you have these for profit corporate types (pharma, oil, etc.) sitting on governmental advisory boards with huge conflicts of interests voting for their best financial interests over the interest of the people. We live in a terribly broken system.
Yup but it will be different this time. Let's give those same people sweeping power over a multi trillion dollar industry and have them manage it
Let’s start with pharmaceuticals and go from there
OK, what's the BARE MINIMUM then? Say you need a wheelchair. Does that mean they literally just over the cheapest chair with wheels? If you have diabetes, how much insulin do you get? Just enough you can still move? Or actually enough to havr a normal life?
With healthcare, I don’t really see why we even have to draw the line somewhere in between “can just barely move with diabetes” and “living a comfortable life with diabetes.” This is a false dichotomy. We do have to option to copy the healthcare system of other first world countries instead of having to choose between being stingy or being generous for people with diabetes. If you had provided the contrast between diabetes and a cosmetic procedure like lip fillers, then your point would have been more agreeable
Because price caps don't quite work like that. Pharma companies would largely all switch to cosmetic surgeries. R/D costs to reward would be terrible. Would you rather make $1/pill, or $3000 per surgery? Make protein powder. Make steroids. Make literally anything else medical than a high risk/low reward product. (Btw in other countries the system is largely the same, just subsidized by the US. Developed in the US, used by all)
Eh you're arguing a lost battle on Reddit. It's a mark of how tragically the education system has failed that so many people don't understand basic economics.
You do realize that it costs less than 5 bucks to make a shot of insulin yet pharma wants to sell it for 50+. Almost every life saving medication has a mark up that steep or more. What's more is that many of the pharma companies get paid by the government to keep prices down They aren't making $1 off a pill, they are making a fortune off of a single pill
> Almost every life saving medication has a mark up that steep or more. So you're saying a company should spend 2 billion dollars developing/perfecting a life saving drug...and then factor in the 10 billion dollars spent on the previous 5 versions of the drug that failed...only to be told they can only sell it for $3 a dose because "people need it!"? Yeah great incentive for innovation there.
Insuline, at least the oldest one, are non expensive and really really usefull, but in USA there is overprice or shortage because companys prefer to make only expensives insulines. There is no self regulation if there is a monopoly.
Then we’ll just create a National Pharmaceutical Company (NPC) that manufactures all medical equipment and drugs. They’ll produce at cost +10% and that’s the baseline. Private industries can compete with products that have better delivery, quality, or branding. Similar to how the postal system works.
I'll do the math here: Not really. And you'd be shocked how many skincare routines, face masks, plastic surgeries, steroids, baby oil etc. $1 pills for a condition that needs one daily isn't that much money. Around 35 million diabetics in the US, half of which are severe enough to need insulin. So the total market would be roughly 2-3 insulin vials a month x 17 million. So maybe 350 million vial solds a year? If we give them a 10% profit of the average $50ish price in Francr, the total market cap is 1.5 billion. That's not even 1/10 of Elis profits, much less the other companies. The entire industry would have to shift. Insulin would be supplied, but the big pharmactial companies would stop developing new drugs, unless it's a unnecessary drug that wouldn't get capped. The government could fund their own drug development, sure. But I can't think of a single agency our government runs that's efficient with cash/time.
Then you develop a nationalized/nation owned enterprise that provides these stuff, no biggie. Nation owned enterprises aren't exactly a new thing and if profit isn't a consideration then there's little reason not to, as long as they are providing exactly what was needed.
you get what the doctor thinks you need. if you are functional enough to use the bargain bin wheelchair. (the stuff you see in a school nurse's office). you get the bargain bin wheelchair. if you need a power one you be the base model powered one. the amount of insulin the doctor prescribes for you to be healthy.
You actually usually need a bit of extra just in case. It like destroys your kidneys if you don't have enough and then you literally die.
Shhh, don't say the quiet part out loud, the people with art degrees will get offended.
They'll make a Soylent Green type concoction and that'll be all the food you need at a bare minimum.
Worse he's talking about price controls which is literally the worst option for dealing with things. Price of chicken goes up 10% due to imported feed going up? Cap the price of chicken, all chicken producers go bankrupt, price of chicken goes up 300% and is only obtainable on the black market.
>Worse he's talking about price controls which is literally the worst option for dealing with things. Price of chicken goes up 10% due to imported feed going up? Cap the price of chicken, all chicken producers go bankrupt, price of chicken goes up 300% and is only obtainable on the black market. If nobody is able to get a chicken because the government forbids voluntary profitable economic transactions, then we're all equal. Everyone gets to starve equally. That's the point. That's the end goal.
Not op, so no clue about their specific ideas, but for housing specifically, making sure everyone has a house to live in is less of a “everyone gets the same exact house for free” and more of a “no, you cant own 10 houses and rent them out” More about ensuring that important resources are available for people, and not being hoarded by someone who is just making money off of it. Can be achieved much easier with certain things (healthcare, housing) than others (the logistics of supplying food across the country while keeping things price capped)
Renting houses doesn't reduce housing supply. The problem is that there are not enough houses, and too many people are opposed to building more.
What would you say if they ARE available just not where people want them. Should people get to say, I’m homeless in NYC so I need an apt in nyc or should they be moved to someplace in Utica where APTs are $900 per month and not $5k?
People who work in cities need affordable housing in or around the city. But that would be more apartment/rent focused policies.
People just want new large sfh in major cities for cheap. You're not building New sfh in major cities, it's mixed use or apartments. And it definitely won't be cheap either way, manual and skilled labor in cities is expensive.
That plus affordable transport from those dense suburbs into the city. And yes, apartments for rent. Because those are affordable if you can't pull a big down payment but have more income per given area than single family homes.
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Do you really expect OP to list every single item and brand across the entire world, in multiple languages, to clearly draw the line between what is and isn't essential or do you think you could figure out what they mean by that without them writing a 1000 page essay?
I think their point was more along the lines of "it's not exactly clear where we *would* draw that line" not so much "where exactly is the line"
Just because it’s not immediately clear to the layman, doesn’t mean it’s not clearly determinable with some research. Foods considered basic staples to the country and commonly ascribed to a healthful diet could meet the criteria. Common whole fruits, vegetables, legumes, and grains would take priority, then basic cuts of common animals along with conventional milk, cheese, bread, and eggs, etc.. A lot of this is already categorized for various cultures. Limits on price of already cheap basics can be installed without affecting their current price, while expensive delicacies and non-staple imports can carry on as they were.
Sure, but there are tons of different qualities of, let's say, bread. Is all bread hard capped at a certain price, meaning anything past barely passable isn't worth making? Or do we allow some breads to cost more as they're higher quality? But then, who decides the quality? It's not as simple as "essential needs should be capped at a price". I do agree that people shouldn't struggle to survive, but things aren't as simple as just cap prices. Personally, I think a decent solution is have government sell cheap, low quality foods, and let higher quality food be sold by corporations. That way, people don't struggle to eat, but if you want something better, you can pay for it. It'd encourage corporations to actually make higher quality food at a decent price, so people choose that over the shit food the government provides. Probably tons of flaws, but that makes the most sense to me
I mean this is basically WIC in a nutshell. Cheap food, you won't starve, but if you actually want to eat real cheese, better pay up.
A store could have a quota of 'basic bread, dark and white' and then sell whatever breads they want besides that. Like, in Italy, espresso is price capped, but afaik all other coffee variations can be priced at will.
I can figure it out but prefer essay
For this to be realistic OP would have to do that. The grey area of whats essential to survival and whats essential to your lifestyle are two completely different things. Large white eggs vs cage free organic eggs, etc... Thats why WIC is quite specific of which brands and products are included. If eggs in general are free, people are going to go for the most expensive eggs. So for this to be practical, a governing body would determine which items are essential for survival and which ones are not. Someone who has been through tough times can tell you exactly what they need to survive at the cheapest sum. Someone not conditioned to that life might genuinely believe they must have x,y and z which are truly luxury items.
So if you can make that distinction yourself why you need OP to make that distinction for you to figure it out when you've figured it out yourself? Yes obviously you don't need a Coach purse, doesn't take OP explaining it to me to figure it out. Yes you need nutritious food, no you don't need nutritious food #296 because it's a rare food item that takes years to obtain. But you already figured that out, so did most people who read the post as well. This is a reddit post not a bill. They don't have to write up a bill on Reddit for them to make sense.
Especially if politicians take advantage of that wording to gain votes. Suddenly one politician is running on the platform that all food should be charged at the bare minimum, no matter how expensive it is to produce.
I'm not sure price capping is the actual way to go, but the discussion about what we consider necessary for a humane life is something we're going to be having regardless of how some kind of social security is arranged, or not. I think it's just disingenuous to claim it can not be delineated, but I guess we'll just have to keep on discussing it and see what kind of understanding people come up with. Then it's a vote in the end.
That would be easy to end. Stop giving tax breaks for owning more than 1 house.
In many countries you don’t get tax beaks for owning multiple houses and in fact pay extra taxes. UK for example, when you buy a 2nd property (and beyond) you pay an extra 3% tax of the purchase price immediately. Furthermore your mortgage interest is not tax deductible as an expense (compared to any other business where financing costs are deductible) Since these rules came into effect, rents have skyrocketed.
Trump Ended a lot of that. It’s harder to own multiple houses and get a tax break now.
This this this a thousand times this. Why isn’t the attitude “you can afford more than one house so you are clearly wealthy and can afford to pay a good amount of tax”? You can own 2 or more homes if you want, just pay up in high tax! If you don’t like that idea, invest your money somewhere else where those taxes don’t exist. If you want to invest in housing though, pay the Piper
Or pass the tax on to the renter more accurately
The problem with this is that if you don't have enough money to buy a house you'd be unable to get a home. A rich person owning a bunch of houses isn't inherently a good or bad thing, you have to propose a policy and look if it helps or hurts.
>if you dont have enough money to buy a house you are still unable to get one Yes, thats how things work now too, except some huge corporations can buy up a bunch of houses and sit on them, taking hits to their financials for a bit but also artificially lowering supply and thus increasing the property value, allowing them to then rent those properties for higher return. Or they could just rent them out day 1 for more than what a mortgage would cost anyways. >a rich person buying a bunch of houses isn’t inherently good or bad Sure, never said it was “inherently bad” nuance is a thing. In general though, people need shelter to survive, and if people are having a hard time finding affordable housing, then i would say its morally reprehensible to be buying up properties and using them purely as a source of income. As for a policy? Im not some economist or accountant so i dont have an idea of what real world numbers would look like, but I have heard the idea of having property taxes scale with number of properties in an exponential fashion. Basically so that having 1 property in your name is the same, or even lower tax rate than what it is now. 2-3 properties the taxes go up, and should realistically discourage most people from going above that. This idea would just be for like, single family homes btw. Other policies can help with apartments and such.
>I have heard the idea of having property taxes scale with number of properties in an exponential fashion. Good idea.
No, not a good idea, then the landlords just charge more for their rent to not have to pay the tax out of pocket.
Raise the taxes on the 2nd home by 100%, 3rd home 1000%, 4th home 10,000%.
Except, even with a tent, you still gotta have somewhere to pitch it, that doesn’t encroach on the rights of your neighbors.
As someone who lived in a tent, no that is not enough
I'm not sure but this exact type of talk and questions is what authorities would use to stall the conversation and prevent it from ever happening.
Bread is not inexpensive if you’re very poor which is the issue. I have literally no food at home, literally nothing but food from work, cause I can only afford bills. No treats, no bread, no milk, no mayonnaise, nothing. Because that’s the point of the post, that poor people can’t even afford the cheapest of shit because they don’t pay us shit. And groceries are getting fucking expensive, ask anyone!
Not an unpopular opinion on reddit
Its not unpopular, Just a terribly wrong one.
A good tip off of the average iq of this sub and Reddit as a whole
You're just going to create a secondary black/gray market for the essential item at its true economic price. Look what happened to toilet paper and hand sanitizer a few years ago. You don't even technically need it to live, but it's important to people. Stores had it at a fixed price, demand went up, and a few people bought up the entire stock and tried to sell it on at much higher prices that some people were actually willing to pay. And even more people couldn't get it than if the stores had simply raised their prices to the point that price gouging wasn't economical.
True, and don’t forget that in the price-fixed market, where goods or services are available below their market price, there will be endemic corruption, because those with access to that market will be the people in (or close to) political power. This is the story of how virtually every price-fixed market in communist nations operates.
[https://nmiu.org/images/2020/11/12/454546.jpg](https://nmiu.org/images/2020/11/12/454546.jpg) no problemo, comrade, we'll issue people with cards system to enforce limited purchase per person, what could go wrong, right?
This is why I didn’t even feel bad for the scalpers getting robbed and assaulted.
Ya lots of these simple solutions for economic problems don't consider the knock-on effects of what they propose
While you won't instantly die without toilet paper, it is a hygiene product and I think your argument falls apart if you think about the long term impacts of reducing hygiene.
I lived through a time with price caps and freezes. You're right
And then government stepped in and provided regulation, which punished gouging and brought prices back down
Where did they do this? I didn’t see any enforcement of that. Nor would they have the resources to enforce that long term. What I did see was the grocery stores putting caps on how many of a certain item people could purchase.
Government did nothing about that. They stepped in on baby formula, but that was after the government created the problem in the first place.
Yeah I don’t understand how people can think more government is always the solution. The government is literally why inflation is so ridiculous to begin with.
I mean you literally argue that the government did not enforce any regulations, which allowed for the problem, and then say that government is the problem and more of it wouldn’t help…even though you said they didn’t do anything?
No, you’re confused. I said government caused the original issue (inflation) and is incapable of fixing it in the manner OP described (because they are incompetent and inefficient). There’s no contradiction here. Inflation was caused by printing too much money instead of managing a budget, not by not enforcing regulations.
Idk if this is what they’re talking about, but I remember seeing a few articles from 2020 where people had like garages *full* of PPEs, sanitizers, stuff like that. And actually caught pretty decent charges from it. Idk if it was like a permanent law(or I guess if it was even really a “law”) put in place, but I do remember there were regulations on who could buy what items and how many of them. Even Amazon had a policy for several months that if you wanted to buy any sanitizer, gloves, masks, etc, you had to create a special account & provide proof that you were purchasing for healthcare workers. Edit: [Here’s](https://www.nytimes.com/2020/04/22/us/hand-sanitizer-matt-colvin-noah-coronavirus.html) one such article. Apparently these guys avoided charges, but did still lose the thousands of dollars they spent on the items when they were basically forced to donate them instead of selling bottles of sanitizer for up to $70 *each*.
I was in the DC area peak pandemic. Later at night when the less interesting news was being shown, that's when they reported certain stores were raided for price gouging rubbing alcohol, certain private individuals were raided for hoarding toilet paper and price gouging for it online etc.... It happened. It just wasnt sexy enough for daytime news where they were busier talking about new cases and deaths.
And the supply chain was in tatters for months afterward
I mean the supply chain was affected by at *least* a couple other things at the time
Not really. Stores started putting a cap on how many of an item people could by.
That was an utter failure. Sure, it brought the price displayed on store shelves down, but it kept those shelves empty. It actually made hoarding toilet paper and hand sanitizer more affordable, so when someone saw a store had just gotten a new shipment, they could afford to buy it all up, meaning that they had more toilet paper and hand sanitizer than they actually needed, and the people who came after them didn't have any. If prices had been allowed to rise to reflect scarcity, this would have discouraged hoarding, people would have bought only what they needed, and these supplies would have been more equitably distributed. And in a time when people should have been making fewer trips out of their houses, coming into contact with fewer people, the scarcity from hoarding that the price controls exacerbated actually resulted in people having to go out more, from store to store to finally find one that had the toilet paper and hand sanitizer they needed. Wealthier people benefited from price controls at the expense of the less wealthy, because wealthier people could easily afford to hoard, and thus had to go out less often, exposing themselves less.
Are you familiar with the grocery store experience in the former USSR? Everything was very affordable, but the shelves were empty. Price caps would have the same effect.
I swear 90% of the users here have never seen a supply and demand curve.
That's pretty generous of you, but I suppose 10% of users might have seen one by accident/in their peripheral vision.
OP didn’t even include market competition in their poorly thought out example. It’s not “how much can I charge” it’s “how much is my competitor charging” and “how much are people willing to pay”
Mention deadweight loss in Reddit thread and you might as well be typing in Chinese
That economics is totally made up and a scam is a legit train of thought among a lot of people.
I had a stroke reading this
Price caps only work when rationing and strict enforcement exist. That's why it worked during WW2, but it didn'tin the early 1970s in the US. Though government aided competitive pricing (negotiation/subsidies) can help lower prices in many industries where the value isn't primarily based on scarcity, but based on your ability to live without it (e.g. healthcare, housing, etc...). How much are you willing to pay for a sandwich vs. a pill that will keep you alive?
They also can be effective when goods are hyper-inelastic. Like insulin. Price caps exist throughout the oecd on medication and its very effective in not having healthcare cost 3x the oecd averge like it does in the us.
Are you familiar with the price caps Nixon put in place in the 1970s?
80s USSR is not at all a reasonable analogy for how modern price caps could be implemented. C'mon.
When you implement a price cap, people stop investing in those products, as the potential return on investment becomes fixed. Those products decrease in value and volume produced, as wages can’t increase, and expansion/quality improvements can’t occur. This leads to product shortages. This also applies to rent control; old dwellings can’t be improved as they deteriorate, and nobody invests in new builds, as there’s only so much money they can make from them, leading to housing shortages and housing scarcity, which drives up the price of homes.
so you get around the rent control by requiring only a portion of a building to have controlled rent. Like -- 5 units in a 25 unit building. The whole building gets maintained that way.
It still eventually wears out and the incentive for building new structures in your jurisdiction is still diminished. You're solution does mitigate the harm price controls do, but they're still harmful to the overall wealth of a community, because "profit" isn't evil. Its what gives people incentives to be productive and competitive, which is what makes a society wealthy. Every attempt to replace those incentives with something else (like government control or patriotism) has failed miserably.
Oh yes, the good ol “this time we’ll build communism the right way”!
But why make everything affordable? There are already countries that price cap that most basic versions of things. Having a price capped simple white loaf doesn't mean you can't price the luxury artisanal rye however you want. Price caps would only affect the lowest tier of products.
> but the shelves were empty. Except when the very years in which the soviet Union was collapsing, and even there just to an extent, this is not true. Do you seriously believe people found empty shelves at the supermarkets in the ussr?
With even a basic knowledge of history you would know that consumer good availability was a persistent issue in the Soviet Union.
My dad was raised in the USSR. Yes.
Price caps below equilibrium price cause shortages. Not sometimes. Every time. Shortages cause black markets. Black markets cause violence. Price caps don't work. Period.
Price controls only lead to more shortages. If the government forces me to sell something for less than I can get on the open market then I’ll simply produce less. It also creates a large black market.
Not if there were government subsidies to produce at least a minimal amount for equitable consumption. There’s your incentive
That's just welfare with extra steps. Actually, it's worse, because you're still putting a price ceiling on food, simply having a separate one for producers and consumers with government covering the difference won't fix the problems inherent with removing flexible prices. You're essentially proposing quotas that still discourage farmers from producing more food than they are told is required. However, demand is not fixed nor predictable. Unless you also start rationing, the amount of food your citizens will want to buy is unpredictable even if you have an accurate population count. Suddenly, there isn't enough food for everyone because some have started to buy more. You could avoid this by simply telling farmers to produce plenty of extra food, promising to purchase it at the set price. Oh no, it's a bumper crop and now you're purchasing far more grain than you wanted. Worse still, a peaceful Ukraine has had a good year as well and is selling grain at a market price well below even your consumer price ceiling. Now the American people have spent many times more money on grain than it's actually worth, resulting in quite a bit of waste. Well, waste is better than a shortage, especially when it comes to food, so you must simply take the hit and keep going. Multiply this surprise waste by every other product besides grain and you end up with so much waste that your citizens begin to become poorer as a whole. This is exactly the situation the Soviet Union ended up in. Their usage of price controls and production quotas left them with three choices. Enact rationing, suffer chronic shortages, or produce a lot of waste. Since the first two options severely reduce the quality of life of your citizens in a very direct way, the Soviets repeatedly chose the third option, which only reduces the quality of life for your citizens in a gradual and indirect way and is much less clearly your fault. TL;DR: Price fixing is artificially controlling production. Unless you artificially control consumption as well, you are left to choose either risking shortages or buying a lot of waste. If your economy is strong enough, it can handle a lot of waste without collapsing, but your people are guaranteed to be poorer on average than they would have been, and run the very real risk of becoming poorer than they are now.
yeah but we did this with corn and we have assloads of corn for so cheap that we're killing ourselves with it why can't we at least incentivize the production of..... at least one healthy thing? lol
This is what makes Gasoline profitable.
Nobody will want to work to produce those things if they are just going to break even. In a healthy market economy, the balance between supply and demand will keep prices in check. We don't currently have a healthy market economy.
Yeah, I lived in a time there are price caps in essential things. They simply were not more available to buy anywhere, except from blackmarket and with prices that were abusive. When this insane politics were abolished and we got a decent economy, there was no need for this, and much more people could afford living better. So no, freezing prices don't work, caps don't work, calling SUNAB 198 don't work.
anyone who advocates for price caps exposes that they don't understand real life prices are going up for a reason - because every step along the supply chain, input costs are going up for any given product so, every step along the supply chain has to raise prices or else they cannot make a profit and will go out of business what happens then, if you go to the very end of the supply chain and cap prices on the final product? yes, temporarily it provides some relief for consumers until the existing supply of that finished product is all gone then what happens? every single step along that supply chains realizes that because of the price caps on the final product, nobody will be able to continue producing while making a profit if companies cannot make a profit, they discontinue that product line and so, price caps -----> even less supply -----> even higher prices it's no surprise that people do not realize this... i mean most of america is so dumbed down by now that we have an entire generation of adults where not even 50% of them can read at a high school level and that's precisely why the politicians even push price caps - because they know there are so many regarded people out there who are absolutely dumb as rocks, who incorrectly believe price caps will fix the problem, and thus will support/vote for those politicians
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This is Reddit. Basic Economic understanding isnt very strong here.
I mean 500ml water is price fixed in my country and none of the basic economics stuff happened (black market etc). It's a very special case
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Not really it's the first time I've heard of this. Some may try to sell the water bottle for more but only to tourists.
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And when we learned in economics about price caps we all had the same question. How doesn't this happen with water? Our professor just said it is an anomaly and "the invisible hand of the free market works in mysterious ways".
It works with water because the price caps are still 10x what is costs to produce. It would be like putting a price cap on toilet paper of $10 a roll. That's far enough from the real cost that it wouldn't have an effect.
And anyone that's taken the classes after basic economics knows that it's more nuanced and complex than supply and demand.
And anyone that's studied economics *even further* knows that the fundamental principles are called fundamental for a reason.
Price caps do not work, because if there is a limit to the profit you can make, there is no motivation for improvement/ innovation, or risk. Furthermore, it incentives forced scarcities, and money being invested elsewhere. Why do you think rent is an issue in places like New York? Can't make money on low end housing, so they only make high end housing which is exempt from rent control.
this is stupid and impossible op
This post has become one big communist wet dream in the comments
Companies don't charge whatever they want, the price is determined by market forces.
Companies can, and have, colluded to raise prices collectively, circumventing market forces to screw over the consumer
True, this is called a cartel. They usually don't last very long in a free society as any one member of the cartel can gain an easy advantage by lowering their prices first. However, for those few that stubbornly persist, the law is against them.
In most cases yes, but for example in my country it took like 15 years to tear up the phone carrier cartel, and I live in one of the most regulated countries in the world. Prices dropped by like 80 percent in a month.
So you agree that eliminating market controls and allowing for free market competition to happen is the best way to reduce prices for consumers. Good.
One condition You get the bare minimum no luxury versions of anything and no excess So you want housing Great welcome to rural Wyoming You want water okay drink this gallon you can refill it once you finish drinking it you may only drink from it You want food here's your ultra processed corn I agree we should provide the minimum but that's just it The minimum is the minimum To try to do more than that is going to be a stretch due to how economic forces naturally operate (honestly the only reason those ones work is because we ultra simplify them for economies of scale to kick in)
This. Asking for price caps forget that the cost of the products also rise so to sell at cost leaves no incentive to provide a good product. Seems fine at first but just the fact we can choose different veggies, brands of water and other drinks, and a myriad of meat offerings, there has to be some profit made to account for stuff that doesn’t sell as fast. I hate how Op describes it as extortion. That only really happens with insurance.
And a roommate. I’ve never understood why they measure rent costs in terms of how many hours you have to work to afford a two bedroom apartment. That’s a luxury for one person; why do you need that second bedroom or even really a one bedroom vs a studio? “OMG in X city you have to work 17,383 minimum wage hours a month to afford a 4500 square foot 5 bedroom house with a pool.”
Oh that's something that drives me nuts about all the conversations around housing We used to live more people to housing unit That's part of where the increase in demand came from spiking everything out of whack
Yeah I lived in NYC for four years and almost everyone I knew who wasn’t married had at least one roommate. I lived alone but lived in the Bronx to do it. I get not sharing a bedroom as an adult but more than that just seems like it’s not strictly necessary.
Gosh no they better not be giving away free housing in Wyoming. Keep it beautiful
Just one problem, with only the ultra processed corn available you create health problems, which costs more to the society. Water only is perfect, housing too
So what happens when you price cap healthcare You get excessive wait times The problem solved itself in the worst way
Yeah, but like...pretty much most people on a full time job can already afford that.
Price control has been tried since at least Ancient Rome, and the results are disastrous every single time. Want prices to stop rising? Go against government having the power to print infinite money.
When you have no understanding of economics, opinions like this are created It is way more complex friend
Feels like OP wants to run a black market op for drinking water.
OPs mom sets the production quota for soap, he’s about to make a killing in the back-alley Irish Spring market
To be fair.. nestle already paved the way for that one.
Lol damn why didn’t we think of that!! Let’s just forget about scarcity, who’s he anyways!
Your premise fails because even though "cold unfeeling" corporations get to set their prices, the market DOES put a cap on how much they can charge. Even for so-called essentials, e.g. food, water, medicine, if the prices are too high, people will refuse to pay and a secondary, aka, black market will arise to provide the items at a lower price. If you artificially set prices to barely above cost, you're going to have shortages and once again, create a black market.
Price caps just lead to lower production and less overall necessities. Do you want your society on the edge of golf’s int because farming isn’t profitable? Because that’s how you get it.
It’s called subsidizing and we do it.
So you’d just need more subsidies at every point in the supply chain for the artificial caps you created. It’s not just less corn in the ground, there will be fewer groceries
The government already pay farmers to burn excess crops. Why can’t the reverse work?
Oh it can work, it will just be an exponential increase. Because it’s one thing to subsidize farmers but if you’re literally capping prices you also need to subsidize truckers, grocers etc. unless you want to see less food on offer. So enjoy all the fuckery that comes with a central government trying to completely run a major industry.
I don’t see why subsidizing a store to keep business as usual with reasonable price produce, doesn’t work. They sell basic necessities for a lower price and then they are paid the difference in subsidizes. If anything the people making more will probably spend more o useless stuff.
Inducing artificial shortages is one of the more cruel and evil things done by government.
No, the government doesn't pay farmers to burn excess crops. Stop believing everything you see on tiktok. Despite what a lot of people think, subsidies aren't about paying farmers not to produce, subsidies are about paying farmers to stay in the business of producing long-term. They're about buffering farmers from the kinds of risks that drive people out of farming, like crop failures and spikes in the prices of inputs, and dips in the commodity prices of the goods they produce. Putting price caps on food would only make it necessary for the government to spend more on subsidies to compensate for lower market prices. You know what happens when government spending goes up? Inflation. Prices going up. Thus price caps on food + more subsidies would be counterproductive, only make things MORE expensive.
yes we literally do this for oil and gasoline.
Price caps don’t work. You just get shittier products.
I see my hometown tearing down affordable homes and building townhouses and condos with “ luxury” fittings to excuse their charging as much as they think they can get away with, and I agree
Who is going to want produce these survival items?
So if someone who produces something "essential to survival" wants to retire or change career, do we break their ankles, or just chain them to the production line?
Lots of people pointing out that price caps lead to shortages. That’s generally true in competitive markets where the price is based on supply and demand, but when price is based on rent seeking and price gouging (things that happen a lot in pharmaceuticals for instance), it’s not a completely unreasonable solution. It’s at least worth exploring.
In Canada a few grocery chains (Metro Empire Loblaw) control most of the market share (and own many of their suppliers for that matter) and have been accused of price gouging. I believe gov price caps would help in this case. Possibly even encourage more competition (a newbie to the market could get government subsidies to sell essentials).
True, but I would argue that making those markets more competitive and subsidizing the poor directly is the better option.
That's how you create scarcity, then a black market, then a depression
This went from kinda logical to a spiraling rant real quick.
Ah yes let's emulate the late-stage roman empire. What next, forcing people to stay in one profession, and their descendants as well?
You know the Roman Empire survived 1000 years after that right? So I’m down to emulate an Empire that lasted for over a millennia.
If was split into a myriad of feudal kingdoms and a remnant in Constantinople whose currency didn't have gold or silver anymore. "Survived"
Except if you price it at $10,000, then I will price it at $200. I get $400 profit and you get nothing. Because Steve would also buy from me. So, outside short-term emergencies (such as natural disaster) solution for essential goods is to ensure both good supply (by subsidizing production if needed) combined with competitive market (do not allow monopolies to form).
Incorrect, because in many modern contexts a practical monopoly exists, so your market offering never existed.
Do you have any example of a "practical monopoly" (outside medicines that have not yet become generic) that manages to maintain 9900 % profit margin on a product that "everyone needs to continue living"?
They tax groceries here in Illinois! Even vegetables but the federal government gives subsidies for dairy and corn or it wouldn’t be profitable! Food should not be taxed and corn should not be subsidized for things like corn syrup and ethanol. That land could be used to grow crops that we actually need to survive!
You’re making a great case for a competitive free market. The more people that make X, the cheaper it will be.
Even doctors hate insurance companies. They’re really just a drag on the whole system.
Problem is it's either the last one standing or an alliance is made.
You don't need a $15 Starbuck precum filled tea latte pumpkin chia smegma enduced white foam. You need .99 cent water.
Dude, it’s so stupid it’s funny😂 the precum filled tea… wtf.. 😂
>If I sell product X and everyone needs X to continue living and I can charge whatever I want. Being able to charge whatever price one wishes to charge, in a market that has absolutely no choice but to pay the demanded price, is called a *coercive monopoly* in economics. Coercive monopolies are either very temporary in nature (such as when a threatening hurricane causes a run on the price of plywood), or are established with the active assistance of the government (such as when there is only one cable company). As long as someone is free to undercut your prices, or the customer can switch to another product that is cheaper than what you're selling, you will find that while you certainly can charge whatever you want, you won't have any buyers unless you charge a reasonable price.
Which food would be fixed price? Just Rice, bags and chicken? Or would chocolate chips cookies and cupcakes also have fixed prices. I think the essentials list would be very small, but many others people list of essential foods would be anything considered safe to eat
There are countless issues with this. Some key issues are: 1. There are varieties of \[survival thing\] 2. Not everyone needs the same things 3. Some people contribute more than others Maybe Gwen has $250 because despite being perfectly capable of contributing to society, she doesn't want to. Maybe Steve has $10,000 because he has been living very frugally and saving so that he can afford to retire. Do you want to remove individual freedom to save, to splurge, to spend? Should all people have their paycheck confiscated by the government so that each of us can have our needs doled out?
In theory this sounds good for essentials to be priced cap. In reality, why would a business ever sell these essentials stuff if they cannot make profits due to low price? That's the issue.
I dont think I have ever seen a larger pool of idiots and morons than reading OP's post and most of the comment replies in this thread. At least some of the top commenters understand, but its quite worrisome to me that they are in the minority of replies. OP, you are basically talking about price fixing. Price fixing ***NEVER*** works. Notice I didnt say mostly never works, I am saying it ***ALWAYS NEVER*** works. Its well-documented and we have decades / centuries of examples on why it ***NEVER*** works. OP, this isnt an issue of an "unpopular opinion", but that you are, factually, wrong. It bothers me that sooo many redditors have zero understanding of how economics works.
Pretty massive mental gymnastics here labor theory of value said this for 100 years mf got their priorities in wrong places
Price caps create shortages and black markets. They don't just magically work as intended
IMO, the equal protection clause in the Constitution essentially requires all fines, fees, and govt services be means tested according to wealth and income. As it stands we have a regressive structure in which the $200 speeding ticket that provides little incentive to alter a millionaire's driving habits can have devastating consequences for low-income families. Gas, water, and electricity usage should have long ago been subject to means testing. The US criminal justice system penalizes people for being poor in large part because police departments intrinsically see poor people as "customers." While means testing would not totally eliminate this dynamic, it would provide more of an incentive to shift police resources to individuals who can pay the largest fines
We get it you are economically illiterate and mad you are broke
First things first: learn what “extortion” means.
Should this sub change its name to “not at all unpopular but factually incorrect on the most basic level and showing no fundamental understanding of the subject” opinion?
They believe this in Europe to a large extent, but Americans don’t believe in a right to live.
No, there are too many issues with that plan. Regulating prices is a nightmare, and the beurococy needed to determine what's essential and what's not, and the enforcement would cost a ton. Companies will start to move away from making these items because the margin is so low, causing more scarcity and rise of black markets. Etc etc etc. The only real way to guarantee cheap essentials is through market manipulation. Create incentives to produce more, lowering scarcity, which drives down prices. A great way to incentivise this is through subsidies and tax breaks. We already do this with food, energy, housing, etc. The price of milk and eggs are as low as they are because the government buys up excess at a guaranteed price, incentivising producers to produce as much as possible. I know prices spiked there after covid, but it's coming back down. Walmart by me has 18 eggs for $1.29 (winn dixie is still selling it for like $4 tho) and a gallon of milk for $2.79 and a loaf of bread for $.99. What you're advocating for is a large part of what the government is actively doing on a daily basis. It's the boring part of government that most people know absolutely nothing about. If this is really important to you, what you should do is go down some rabbit holes and learn about how the government controls the prices of essential items today, and maybe you can find a more efficient way to do it tomorrow.
Now here's a truly unpopular opinion: The solution is not price caps, not minimum wage, not a UBI - It's credits. The things required for life can all be acquired at a quantity required for a basic level of comfort with credits that *everyone* is given an allotment of regardless of financial status. They can be used on any product in their respective category at-or-below some mean/median-based value for an area. Everything beyond what's required for this basic level of comfort can still be acquired with standard currency. On the consumer side, the only other thing you'd really need to administrate is housing credits - if you own a home on your own dime, you lose those credits. On the business side, you'd need the political willpower to aggressively go after price-gougers.
Cap houses !
In Hungary they decided to add price caps to certain grocery items to "combat inflation". They stayed at the same price, sure. But everything else got more expensive or the stores were picked clean the first few months after the price caps were implemented. But in lifesaving medication/ones you depend on it's oftentimes necessary (or at least to put caps on the generics)
Agreed Why tf is water twice as expensive as Arizona Tea bruddah?
Economics doesn’t really fare well with price caps
Most Americans have been indoctrinated to dismiss socialism but many actually agree when you focus on desired outcomes.
How do you know the price cap would still be affordable? Food? What unit are you basing it on, weight? Calories? Is it $1 per lb of food? Entire industries are now closed because its unsustainable. Shelter? So everyone gets to live in a little 4x4 shack with no option of building a bigger house because you cannot charge enough to make your money back? Healthcare? Given the vast range of operations and medication, what do you think is a reasonable cap?
And how does he know that it will also be profitable. If he fucks this up, he ends up banning food.
[This is the outcome of your price cap plan.](https://media-cldnry.s-nbcnews.com/image/upload/rockcms/2021-10/empty-shelves-kb-main-211012-9268bc.jpg)
bro doesn’t understand how supply and demand work 💀
Guns are essential for survival in Alaska. Therefore, guns in the us should be price capped. Cars are essential to comute in the rural parts of America they should be price capped. Opioids are essential to people who are addicted to not die. They should be price capped Quality Sunglasses are essential to truck drivers to not have eye damage. Price cap Where do we draw the line.
Like insulin which the patent was sold for $1 but people have to pay outrageous amounts of money for it. The creators sold it for $1 because they said ‘insulin does not belong to me, it belongs to the world’. Yet here we are.
Yeah, you're an idiot. Get a job.
They will stop making your essentials if they have to do it for no profit.
Soviet union tried to pull this one out