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#11
12-10-2006, 05:37 PM
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Re: Benevolent govt raises price of milk
[ QUOTE ]
Of course milk would be cheaper. [/ QUOTE ] Are you sure it would be cheaper in the long run? I don't know the dairy market well enough to comment, but their are certainly industries where government subsidies/regulations/price controls serve to stabilize markets and encourage capital investment that leads to lower prices. Even in established markets they can lead to lower prices in the long term when the emergence of dominant players and the possibility of predatory pricing practices threaten smaller producers that still represent a substantial portion of the overall market. 
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#13
12-10-2006, 06:01 PM
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Re: Benevolent govt raises price of milk
[ QUOTE ]
[ QUOTE ] This is pretty gross. The bad part is the existing system though, not that they shut down people who exploit loopholes. [/ QUOTE ] So the system is bad, but trying to go outside the bad system is also bad? [/ QUOTE ] At the very least, the one is worse than the other. It's not like this guy had come up with a way to completely circumvent the law and restore free competition. He just found a naturally inefficient form of production that was favored by the regulatory system. Allowing that form of production to flourish might lower consumer prices, but there's no guarantee that it will increase total economic efficiency. In addition, whatever goals are served by the original system will be circumvented. I'm not defending cartels, but once the government decides to implement one, it shouldn't be surprising that they enforce it.
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#15
12-10-2006, 06:05 PM
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Re: Benevolent govt raises price of milk
[ QUOTE ]
[ QUOTE ] Of course milk would be cheaper. [/ QUOTE ] Are you sure it would be cheaper in the long run? I don't know the dairy market well enough to comment, but their are certainly industries where government subsidies/regulations/price controls serve to stabilize markets and encourage capital investment that leads to lower prices. Even in established markets they can lead to lower prices in the long term when the emergence of dominant players and the possibility of predatory pricing practices threaten smaller producers that still represent a substantial portion of the overall market. [/ QUOTE ] No, really, we should just break windows and that will really help the economy!
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#16
12-10-2006, 06:08 PM
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Re: Benevolent govt raises price of milk
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wordwiz, can you name a few products that are sold on the free market in the US? All I can think of are drugs and political influence. [/ QUOTE ] Offhand, I have no idea. I imagine that most every market in the U.S. is subject to some sort of govt interference, albeit usually less than that of the milk market.
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#17
12-10-2006, 06:37 PM
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Re: Benevolent govt raises price of milk
[ QUOTE ]
[ QUOTE ] [ QUOTE ] This is pretty gross. The bad part is the existing system though, not that they shut down people who exploit loopholes. [/ QUOTE ] So the system is bad, but trying to go outside the bad system is also bad? [/ QUOTE ] At the very least, the one is worse than the other. It's not like this guy had come up with a way to completely circumvent the law and restore free competition. He just found a naturally inefficient form of production that was favored by the regulatory system. Allowing that form of production to flourish might lower consumer prices, but there's no guarantee that it will increase total economic efficiency. In addition, whatever goals are served by the original system will be circumvented. I'm not defending cartels, but once the government decides to implement one, it shouldn't be surprising that they enforce it. [/ QUOTE ] It sounds like exactly what you're doing, to me at least. If cartels are bad, then how can trying to act outside them also be bad? I understand that the government is going to try and take action when the cartel members start squealing, but that doesn't make it right.
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#18
12-10-2006, 06:41 PM
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Re: Benevolent govt raises price of milk
[ QUOTE ]
Even in established markets they can lead to lower prices in the long term when the emergence of dominant players and the possibility of predatory pricing practices threaten smaller producers that still represent a substantial portion of the overall market. [/ QUOTE ] Predatory pricing doesn't really exist.
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#20
12-10-2006, 06:42 PM
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Re: Benevolent govt raises price of milk
[ QUOTE ]
[ QUOTE ] [ QUOTE ] [ QUOTE ] This is pretty gross. The bad part is the existing system though, not that they shut down people who exploit loopholes. [/ QUOTE ] So the system is bad, but trying to go outside the bad system is also bad? [/ QUOTE ] At the very least, the one is worse than the other. It's not like this guy had come up with a way to completely circumvent the law and restore free competition. He just found a naturally inefficient form of production that was favored by the regulatory system. Allowing that form of production to flourish might lower consumer prices, but there's no guarantee that it will increase total economic efficiency. In addition, whatever goals are served by the original system will be circumvented. I'm not defending cartels, but once the government decides to implement one, it shouldn't be surprising that they enforce it. [/ QUOTE ] It sounds like exactly what you're doing, to me at least. If cartels are bad, then how can trying to act outside them also be bad? I understand that the government is going to try and take action when the cartel members start squealing, but that doesn't make it right. [/ QUOTE ] I think this ordering should be unobjectionable to you: No drug laws > Effective prohibition of drugs > Formal prohibition of drugs, but drugs provided by murderous Colombian cartels and street gangs Likewise: Free competition > Gov't cartel > Exploitation of weird loophole. Conceivably, at least. If milk producers as a group came up with a way to hoodwink regulators and go about their normal business without interference, OK. Doing that would basically nullify the law. In this case, the entrepreneur is leveraging the law to make an inefficient method of milk production cheaper. That's not as obviously good.
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