I wanted to talk about price gouging so I figured it was a great time to start a thread where I could post about late capitalism.

Its funny how people who think they support late capitalism voice outrage over price gouging, especially after disasters. They say it is wrong because people need that water and gas. The problem with these people is that they are hypocrites. Capitalism is all about price gouging all of the time and these people are just used to being able to pay the gouged price.

What about all of the people who cannot afford food, housing, education, and healthcare all of the time?


There is a high demand for water and limited supply. The store has the capital and is providing the valuable commodity. This is capitalism working.

9/5/2017 10:29:05 AM

Is there any truth to the premise that price gouging such as this (when it's allowed by the authorities) is designed to prevent people from hoarding more than they need and thus ensuring supplies for everyone?

9/5/2017 11:02:20 AM

it's the economic control to shortages, what kind of proof are you asking for?

9/5/2017 11:37:35 AM

this is literally a text book example of supply/demand.



[Edited on September 5, 2017 at 12:08 PM. Reason : HIYO!]

9/5/2017 12:08:34 PM

My hope is that this is end-stage Capitalism.

9/5/2017 12:10:39 PM

The implication in the OP is that price gouging is occurring as opposed to some natural control mechanism to keep supplies available for everyone. So that's why I asked.

9/5/2017 12:16:19 PM

Don't respond to Earl. Seriously.

9/5/2017 12:26:09 PM

I thought that was determined to be a mistake made by some dumbass. Best Buy doesnt sell water by the case. This thread is based on a lie

9/5/2017 12:26:33 PM

the pricing looks right if that is the total price for the case buying that many individually priced single bottles.

maybe we should just get mad that they charge $1.79 for a bottle of filtered municipal water

9/5/2017 12:31:36 PM

I have a hard-time calling post-apocalyptic Houston a functioning market (and thus condemning capitalism). Several of the assumptions that underlay all free-market arguments have completely collapsed. People aren't able to move freely, goods can't move freely, hell in some cases actual capital may have problems moving freely.

Market failures happen. They should be addressed (typically by government). Trying to indict the entire history of an economic system by pointing at a disaster zone seems pretty lazy.

9/5/2017 1:02:25 PM

there's no such thing as price gouging. there is only the supply curve and the demand curve.

after hurricane matthew, i was trying to get back to wilmington from burlington. i started looking for gas after i got out of wake county and couldn't get gas anywhere because of power outages. i finally found a station that was open in clinton. i was on fumes. the price was the same as what it was before the storm and ensuing run on gas. i waited in line and they cut the pumps off as soon as i was done pumping. not because they didn't have any more gas, but because people were filling any container they could and they would've sold out in a few hours. they wanted to keep some on hand. they wouldn't raise the price for fear of "price gouging" laws. if they'd raised the price to match current demand, they could've kept selling gas and folks like me who were really hard up for gas would've only bought what they really needed. i could've got home on only 3 or 4 gallons, but instead, i filled the tank completely.

i'd much rather pay $40 for a case of water that i really need than find an empty shelf. besides, if you don't let the store raise their price to match, then the black market will do it anyway.

9/5/2017 2:30:46 PM

^ wouldn't rationing be a better solution in that situation? Doesn't make sense to give rich people the ability to buy up all the gas/water, only for a poor person to die or not have gas, or to charge them an exorbitant price later.

9/5/2017 3:30:18 PM

i don't have a problem with private businesses rationing, limiting, selling to certain people on certain days, whatever they think is best.

however, the problem with rationing is that it eliminates the incentive for suppliers to rush to increase supply. if the market is left alone, prices spike, suppliers go nuts and rush the needed goods into the market, and prices return to normal as soon as possible. rationing just prolongs the shortage.

9/5/2017 4:03:56 PM

this water example is ridiculous anyway. for about the same price as one of those cases of water, you can buy a water filter that will take care of 100k gallons of water. be prepared. we're not talking about people dying here, we're talking about them enduring some mild discomfort.

9/5/2017 4:16:35 PM

Quote :

"there's no such thing as price gouging."

9/5/2017 5:13:04 PM

^NeuseRiverRat prob thinks drug patents are BS too so point invalid



[Edited on September 5, 2017 at 7:32 PM. Reason : maybe]

9/5/2017 7:28:06 PM

Quote :

"this is literally a text book example of supply/demand. "

Thats the point.

Quote :

"is designed to prevent people from hoarding more than they need and thus ensuring supplies for everyone? "

Then its an awful design because one person can still buy all of it.

Quote :

"I thought that was determined to be a mistake made by some dumbass. Best Buy doesnt sell water by the case. This thread is based on a lie"

All points still stand.

Quote :

" Trying to indict the entire history of an economic system by pointing at a disaster zone seems pretty lazy. "

As dentaldamn stated, this is just an example of how supply/demand economics work. I use water because people who generally live in privilege only seem to notice the problem with these basic economic concepts at time of disaster or crisis when prices start to rise towards the upper limits of their own reach.

For most people, this is what the prices of housing, healthcare, food, or education look like ALL OF THE TIME.

Quote :

"^ wouldn't rationing be a better solution in that situation? Doesn't make sense to give rich people the ability to buy up all the gas/water, only for a poor person to die or not have gas, or to charge them an exorbitant price later."

This is exactly what happened with land.

Quote :

"rationing just prolongs the shortage."

Unless we are talking about somehting with a finite quantity.

9/5/2017 8:27:30 PM

^^yeah, not a fan of patents

9/5/2017 9:18:15 PM

Late stage capitalism



I hope it's just beginning. God knows it's better than early stage communism (terrible), middle stage communism (mass executions), or late stage communism (total collapse, power vacuum).

There is no such thing as price gouging. You have a few options:
1) Keep the price the same, don't restrict the sales, sell out in minutes/hours
2) Keep the price the same, ration, get giant lines
3) Raise the price, only the people that really need the thing being sold will buy it, people that are stocking up "just in case" (the bread and milk folks) will be deterred by the price

Or, hidden option 4 - keep the price the same, don't restrict supply, and somehow everyone gets everything they need at the price they want. Note: Only works in the heads of people that don't understand basic economics.

9/5/2017 9:56:32 PM

That infographic doesn't help your cause.

Quote :

"God knows it's better than early stage communism (terrible), middle stage communism (mass executions), or late stage communism (total collapse, power vacuum)."

Looks like you still don't understand what the word communism means or that its not the only alternative to late capitalism.

Quote :

"3) Raise the price, only the people that really need the thing being sold will buy it, people that are stocking up "just in case" (the bread and milk folks) will be deterred by the price"

Option 3 is a good result but raising the price doesn't get you there. Raising the price means only the people who have enough money will buy it. It has nothing to do with need. Someone with a ton of money can still buy it all and you sellout in minutes.

In the gas example above, option 3 would be achieved by only selling to people with less than a quarter tank in their car and placing a gallon limit.

9/5/2017 11:53:32 PM

Communism will forever and always look great on paper, as a theory. Maybe that's why academic types love it so much.

But governments suck. People suck. They always screw it up.

Can we name one government that has enacted communism properly and as a result maintained some level of prosperity?

9/6/2017 7:41:38 AM

Quote :

"That infographic doesn't help your cause. "

Why? It shows that poverty is steadily being reduced. Is that somehow a bad thing? Or will you argue that it is not a feature of "late stage capitalism"?

Quote :

"Looks like you still don't understand what the word communism means or that its not the only alternative to late capitalism."

I know what communism means according to the communists themselves. I just think it (public ownership of the means of production) is fundamentally at odds with human nature. It describes a utopian state that - even according to the communists - can only happen once capitalism has done its work. Where I diverge from communists is that I don't see any reason to believe that communism will naturally happen. There's a of mysticism around Marx the Prophet, and Capitalism then Socialism then Communism must happen, because it has been foretold. I just think that's bullshit and unknowable.

Quote :

"Option 3 is a good result but raising the price doesn't get you there. Raising the price means only the people who have enough money will buy it. It has nothing to do with need. Someone with a ton of money can still buy it all and you sellout in minutes. "

Rich people don't buy everything up with the prices are raised, because rich people are not in the business of buying things at 10x their regular price when they don't actually need or want those things.

It's true that some people just can't afford the higher price, but there are people that can't afford the lower price either.

Quote :

"In the gas example above, option 3 would be achieved by only selling to people with less than a quarter tank in their car and placing a gallon limit."

That sort of works for gas, but what about for water? Are you going to do an audit of people's homes to make sure they actually need water? How about for tree removal?

Price gouging is, perhaps, the best example where the market works perfectly if people shut the fuck up and let it work. If the price of water is 10 dollars a bottle, do you think it might be worth it for people to come from other states to sell water at a lower price? Yeah, I think so. By allowing the price to go up, you're going to get more people attempting to enter that market, which ends up lowering the price back down and making necessary goods available.

[Edited on September 6, 2017 at 9:52 AM. Reason : ]

[Edited on September 6, 2017 at 9:56 AM. Reason : ]

9/6/2017 9:48:31 AM

this only makes sense in a non-existent ayn rand fantasy world where charity or tryint to help people never exists

9/6/2017 9:59:16 AM

Quote :

"It describes a utopian state that - even according to the communists - can only happen once capitalism has done its work."

Forgot to add "and can only happen once certain classes of humans are exterminated."

Quote :

"Rich people don't buy everything up with the prices are raised, because rich people are not in the business of buying things at 10x their regular price when they don't actually need or want those things."

I think that's a good point but it may sidestep the actual suggestion which is that there is a subset of people who WANT to be rich and are the type to engage in shady shit to do so. I liken it to ticket scalpers (not your average individual, but the guy who buys up all the remaining tickets and then sells them at 4x the price).

[Edited on September 6, 2017 at 10:23 AM. Reason : a]

9/6/2017 10:21:44 AM

Quote :

"Can we name one government that has enacted communism properly and as a result maintained some level of prosperity?"

Cuba, China, and Vietnam have all maintained some success through socialism

Quote :

"Why? It shows that poverty is steadily being reduced. Is that somehow a bad thing? Or will you argue that it is not a feature of "late stage capitalism"?"

1. it only shows "extreme" poverty which means most poverty isn't shown. Lack of middle class isn't shown.
2. Capitalism, like slavery, moves people out of desperation and into a situation where they have to work (like slaves) under unethical conditions with their output stolen in order to survive
3. The socialist nations with mixed economies decrease at a much faster rate. Most of that reduction happened in China and Vietnam.
4. Africa and latin America hardly moved, largely because capitalism has prevented the distribution of new technology that should have eradicated extreme poverty everywhere

Quote :

"Rich people don't buy everything up with the prices are raised, because rich people are not in the business of buying things at 10x their regular price when they don't actually need or want those things."

We have megalandlords like Trump who buy up all of the real estate and suppress housing supply in order to further gouge prices. John Malone owns 2.2 million acres of land so of course people buy more than they need. I know plenty of people who do this kind of consumption all of the time. Multiple 800 dollar handbags, 300,000 dollar 4th cars, etc. People in late capitalism will pay extra for things just to show society that they are part of the elite class that isn't affected by prices.

Your idealistic view of price gouging would only be true if wealth was evenly distributed across the board.

[Edited on September 6, 2017 at 10:51 AM. Reason : k]

9/6/2017 10:49:53 AM

Quote :

"Option 3 is a good result but raising the price doesn't get you there. Raising the price means only the people who have enough money will buy it. It has nothing to do with need. Someone with a ton of money can still buy it all and you sellout in minutes."

The gas tank in Bill Gate's car is only so big. That the rich will probably continue to hoard after the price rises is largely irrelevant: we just need to deter enough people from hoarding so the pumps don't run dry. If we're not deterring enough people, the price didn't rise enough. The higher it goes, the more "comfortable, but not rich" people will be deterred. Also, there is a feed-on effect: if people expect there to be fuel available later, they're less likely to hoard now. Also, if prices rise enough, it becomes profitable to ship supplies in using marginal transport techniques, such as long truck routes around the disaster area, and for suppliers to build extra inventory into their systems before hand.

And while rationing is a better idea than just not price gouging, it doesn't make sense to me. People don't usually just need 4 gallons of gasoline to get to the office and back, as those people shouldn't be going to work at all. The people that need fuel are those fleeing destroyed homes, trying to rescue loved ones, trying to deliver supplies, run generators, run water pumps, or work-crews for cleanup and repair. 4 gallons won't work for these people. But, paying extra for fuel, similarly, would be cheap for them.

As a poster said above, most fuel is lost during the disaster because of the loss of power. It is not all that expensive for gas stations to be modified to run on generators. But, the logic just doesn't add up: during a disaster, the gas station owners and their employees want to be at home tending to their families and property, not at work. Plus, the generators cost money to buy and maintain, which anti-gouging laws won't let them recoup. Add in the fact that merely being open is a problem, as whatever price you charge can garner a gouging complaint, pissing off your customer base. Meanwhile, being closed or sold out is not a problem, as your customers and everyone else will just conclude you were just another victim of the storm.

So, the logical thing for a gas station owner to do is to purposefully not stock up before the storm, in hopes of selling out before the power goes us, then slap a chain on the door and send everyone home. How the hell is that good for society?

[Edited on September 6, 2017 at 11:08 AM. Reason : .,.]

9/6/2017 11:01:46 AM

9/6/2017 1:09:07 PM

Quote :

"2. Capitalism income taxes, like slavery, moves people out of desperation and into a situation where they have to work (like slaves) under unethical conditions with their output stolen in order to survive"

9/7/2017 6:38:51 AM

^^ Well, we can blame price gouging laws on that one. If you've gotta break the law to sell something for what it is worth, then you might as well break other laws too (prostitution).

Of course, if price gouging was legal, then the odds would be much better than there is plenty of gasoline for sale from actual gas stations for not a lot of money, no need to prostitute yourself, just pay more. After-all, gasoline is cheap normally. Double the price and it is still cheap for what it is. And I'd bet hoarders would stop hoarding long before it got to $4.

But, price gouging laws are a thing, so the real price in terms of money is infinite: not for sale anywhere and anyhow. In that case, "anal sex" is a cheaper price than "infinite money".

9/9/2017 9:45:51 AM

Quote :

"In that case, "anal sex" is a cheaper price than "infinite money"."

I think you're seriously undervaluing anal... but maybe there's just an anal bubble right now.

9/9/2017 1:16:04 PM

Quote :

"If we're not deterring enough people, the price didn't rise enough."

I don't want to deter people though. I think everyone should have access to gas.

Quote :

"f people expect there to be fuel available later, they're less likely to hoard now"

Some resources are finite and some things are needed at a specific time. You can't always wait until theres more. Perhaps the supply/demand market is adequate for things like that.

Quote :

""2. Capitalism income taxes, like slavery, moves people out of desperation and into a situation where they have to work (like slaves) under unethical conditions with their output stolen in order to survive""

This is false because progressive taxes don't start until you reach a certain threshold.

9/10/2017 1:59:40 PM

https://www.youtube.com/watch?v=2_TvG_ZNvQo
Gotta love the free market!

9/10/2017 3:44:05 PM

^needs to be more free no doubt, less taxes and regulations

9/10/2017 9:36:17 PM

Less regulations for the corporate giants who lobby the government to rig the game and set heavy, back-breaking regulations for little guys like this.

[Edited on September 10, 2017 at 10:05 PM. Reason : k]

9/10/2017 10:04:40 PM

Quote :

"I don't want to deter people though. I think everyone should have access to gas. "

Hanging a "$2.19" tag on an empty pump doesn't get anyone access to gas. For everyone to have access to gas, we need to deter hoarding. Nothing would deter hoarding more than a sign reading "the price of gasoline is temporarily $4.00"

[Edited on September 11, 2017 at 9:10 PM. Reason : .,.]

9/11/2017 9:09:19 PM

I'm no economist... but I listen to the Freakanomics podcast...

They said viable solution to this problem is a scaled pricing system. EG: a customer's first case of water is $5, the second is $7, the 3rd is $10 and so on. The rate of scaling can be linear or exponential depending on the scarcity and demand on the product. Obviously there has to be some sort of check on the system so customers don't just get back in line with one of the product at the lowest price. The author said that this prevents hoarding at low prices and maintains availability, but allows people who really need the product to purchase what they need.

I'm interested to see what any of you economics folks think about this system? Would it work? Any more academic literature to support or contrast this view?

9/12/2017 10:40:25 AM

https://www.bloomberg.com/news/features/2017-09-12/why-american-workers-pay-twice-as-much-in-taxes-as-wealthy-investors

9/12/2017 3:00:08 PM

^^ Price differentiation is a thing, we do it lots of ways. Charging more the more you buy is certainly possible, but seems counter productive. The counter example is this: Why should a mother with sick children that need lots of water be charged more than the guy that doesn't really need water, but the price for one case is only $5.

In an ideal world, anyone that doesn't need water won't buy any. In an ideal magical world, we'd find some way to identify the guy that just wants to buy the water to increase his existing hoard and demand he pay $100 while the mother of three who lost her storm supplies when her house collapsed gets all the water she can carry for free.

But, the cashier doesn't know these people, and there is neither the time nor the resources to figure out who is who. As such, it seems to me, everyone should face the same high price.

9/14/2017 12:40:29 AM

https://americanaffairsjournal.org/2017/05/corporate-contradictions-neoliberalism/

I thought this was a pretty good read. Honestly, the entire journal itself has been one of the better ones I've read.

9/19/2017 10:58:30 AM

Quote :

"Capitalism continued to rely on the Protestant ethic of sobriety and delayed gratification in the sphere of production, yet, contradictorily, had come to rely on modernist hedonism and credit purchasing in the sphere of consumption. Modern capitalism needed people to be sober by day and swingers by night. What is more, the displacement of the Protestant ethic by hedonism, Bell argued, was primarily the work of capitalism itself. Its mass production urbanized the population and created an economy of abundance, the continuation of which relied on ever increasing demand, stimulated through marketing and the extension of credit. This pulled the middle class away from small town, Protestant values. In other words, capitalism was undermining the conditions of its own existence. The economy’s contradictory need for both prudence and prodigality from its participants was “the deepest challenge to the society.”"

I disagree. Credit and the abuse of credit are as old as capitalism itself (which is as old as civilization). There is nothing in capitalism which inherently needs consumers to spend beyond their means. Producers will chase whatever dollars are being spent. If people for whatever reason refused to spend on credit, then producers would be forced to adjust their product mix, not quit producing.

Of course, there might need to be a monetary shift in response to such a sudden behavior shift. People that would have lent their money to others for a rate of return would suddenly find no borrowers. Producers that produced in the hope of selling to those borrowers would find their products go unsold. But although that alone could cause a recession, it is only a short term problem. Producers would learn not to make such products, bankers would learn not to rely on such instruments. Going forward, credit would be slower, as consumer credit was no longer such a big business, interest rates, overall, would be lower, while money growth and therefore inflation was similarly lower.

But, barring mismanagement by the central banks and society at large, unemployment would return to normal levels, and arguably recessions should be less severe, although ironically more common. This would be because business borrowing tends to respond sharply to downturns, leaving only consumer credit to actually respond to changes in monetary policy. If consumer credit wasn't a thing, that would leave no-one to actually increase borrowing when the central banks lowered rates.

9/21/2017 3:22:51 PM

^^ A never-ending stream of half-truths and outright falsehoods in pursuit of an agenda...but yes, it was fun to read all the same.

9/21/2017 4:45:51 PM

I think it's a bit much to say that. I'm not saying I blindly follow the article but I'm not a research scientist or economist. This guy is. I'm not going to dismiss his research just because it doesn't sound right.

I mean unless you're an economist or whatever, I would argue you should give him a little more credit.

[Edited on September 21, 2017 at 5:32 PM. Reason : a]

9/21/2017 5:31:51 PM

woops

9/24/2017 12:11:50 AM

That's a good one.

9/24/2017 6:35:41 AM

^^except it would because it would still be a vastly superior car to almost every other one when it comes to engineering. It may not have bragging value but the engineering absolutely does.

9/24/2017 2:04:23 PM

Thats the point. Late capitalism has created an egocentric culture that assigns value to X because "I have it and you don't". Its gotten so disgusting that it is even being applied to something as essential as healthcare with "Cadilac plans"

9/25/2017 7:13:41 PM

I get your point. Didn't get that at all from the tweet, but fair enough.

9/25/2017 7:42:13 PM

Quote :

"Thats the point. Late capitalism has created an egocentric culture that assigns value to X because "I have it and you don't". "

Incidentally, the reverse of this - "I don't have it and you do, and that's wrong" - is the essence of socialism/communism.

In social hierarchies, happiness doesn't seem to come from absolute wealth, it seems to have more to do with relative wealth or status, e.g. where you fall in the hierarchy. If you're at the bottom, that sucks. If you're at the top, that's great. Socialism is when you're at or near the bottom, you don't have the skills or temperament to navigate upwards, and so you just say fuck it, let's not have a hierarchy at all.

Now, if enough people say fuck it, let's destroy the hierarchy, then they actually can. The problem is, the people at or near the bottom are usually some combination of uneducated, lazy, low IQ, mentally ill, or criminal. Not the sort of person you want leading the revolution. These people, not being leadership material and not great at choosing leaders, will invariably choose as a charismatic sociopath as their leader, ushering in the next blood bath of a worker's revolution.

9/26/2017 1:50:49 PM

Quote :

"The problem is, the people at or near the bottom are usually some combination of uneducated, lazy, low IQ, mentally ill, or criminal."

Seriously? Did you put your top hat and monocle on and spit on the nearest orphan when you typed that out?

[Edited on September 26, 2017 at 6:19 PM. Reason : .]

9/26/2017 6:15:29 PM

I'm not saying they're all bad people, I'm saying they have a proven track record of not being able or willing to climb the social ladder. It's not like there's some underground society of poor and disenfranchised that are secretly competent but, for some crazy reason, they can't use their competence to meet their basic needs. If they were competent, they would be succeeding in the capitalist framework.

The things that make you succeed in capitalism are the things that make you succeed in any system. If these people "take over" the government or the means of production, they are not qualified to run anything. They're not even qualified to run their own lives effectively, apparently. It's hard to know what, if anything, they are qualified to do, but I'm definitely not inclined to take their advice on how to overhaul society.

9/26/2017 10:29:38 PM