On 31/08/2018 16:05, Elliot Temple wrote:
> On Aug 31, 2018, at 2:49 AM, crawle...@gmail.com
>> On 21/08/2018 16:04, Elliot Temple wrote:
>>> How about price controls? Capitalism rejects price controls, but you presumably are in favor of some?
>> Apologies for the long wait, I've been looking up what price controls we've got here. I think they've got their place, but generally not useful for most things.
>> Where there's a monopoly, then I think there needs to be some way to prevent the supplier hiking prices to extreme levels as people have nowhere else to go (I mean essentials like water, not luxuries like pay TV). Here in the UK, there are limited controls on utilities and railway fares, and limitations on interest rates for short-term loan suppliers. Otherwise prices are pretty much a free for all; since there are other suppliers, if something gets too expensive there are usually cheaper options.
>> We also have a cap on university tuition fees, but this is largely a paperwork exercise since most people obtain government loans for this anyway, which is paid off over a period of time as a percentage of their wages.
> Minimum wage laws are a price control on the price of labor. Any comment on those?
I have no problem with a minimum wage. I'm not sure I's call it the
"price of labour" in that way as that sounds like work is a commodity to
be sold, like a tin of beans, whereas in fact the operation is the other
The minimum wage was introduced to ensure that workers didn't get ripped
off. Unfortunately, the labour market isn't such that if you don't like
one employer you can just go and get another; despite what the
governments tell us, there are not swathes of companies desparate for
> Also do you have any kind of *principle* by which you decide whether
> to approve of disapprove of particular price controls?
Does such a control help or hinder? In particular, does it help or
hinder the customer? In a monopoly, the answer is probably yes.
Otherwise, probably not.
> Is your opinion related to economics in some way?
I'm not an economist, so I can't really say.
> Also you didn’t say whether you agree or disagree with price controls on short term (“payday”) loans. I think those price controls make those loans less available to people who “need” them (face disaster without them, and therefore can substantially benefit from them).
If I need to borrow £100 until the end of the month, having to pay back
£200 isn't going to help me in the slightest, and that's the sort of
rates that were being charged. The new limits are 0.8% interest per day
and an absolute maximum of 100%. I don't have the slightest problem with
this, and it certainly hasn't made loans less available. Why do you
think it wouild?
> Price caps reduce the supply of a product below what the free market would provide, and thereby deny the product to some customers. (Unless the price cap is set high enough to not really matter.
I can see that would happen if the cap was less then the price needed to
support its production. I don't think that's ever happened, though.
> You also didn’t say whether you agree or disagree with price controls on university tuition, you only said you don’t think they matter much because the government also interferes in that market in other ways (which you also didn’t express an opinion about).
Before 1998, all full-time university tuition was free, financed by the
government (for UK students - overseas students always paid for their
own). After that, universities were allowed to charge up to £1,000
(since risen to £9,000) per student per year.
Students can apply for a loan from the government for the full amount,
which is paid directly to the university. This loan is repayable through
the PAYE system, as a percentage of earnings above £25,000. After 30
years, regardless of amount repaid if any, the loan is cancelled.
My opinion is that, because of the way the loan is operated and the
relatively high level of defaulting, they system is largely pointless
and should revert to direct financing.
I don't know what you mean by the government interfering in other ways.
Money for education has been a problem for a long time, with schools
often complaining about lack of funds resulting in shortages of books
and other materials. Most education is financed by local rather than
national government, and it is always something of a juggling act to
ensure everything needed is paid for. Perhaps there should be more
"interference" (pronounced money) from central government - but even
then, the money would have to come from somehere else.
A new problem is that some schools and colleges are run by private
for-profit organisations independent of the LEA, with much of their
money being used to pay their directors rather than buying equipment.
>>> Like http://fallibleideas.com/capitalism
>> Much of that is what I already feel, although I think it's perhaps a bit simplistic in places; some of it I definitely disagree with. I can write in more detail if you wish.
> If you can quote something you disagree with and point out why it’s *false*, that’d be great. As a first priority, please begin with anything which is false as a matter of *economics*, then move on to other categories of issues later. If you disagree but can’t point out why something is *false*, then please clearly state that you found zero false statements in the essay, and explain what other type of criticism you have.
I'll have a think and see what I can come up with. Like I said though,
I'm not an economist, so my knowledge of "economics" is prely from the
point of view of a consumer (and one-time reseller).