To use the language of economists, you increase the cost of cooperation, and you destroy social capital. Decreasing the cooperative state of a body is harmful under normal circumstances, as fascinating new research shows. Isolating antagonistic actors is highly important for maintaining the?

One thing to add: Eric, in the aftermath of the last quake argued for price gouging on goods other than petrol; specifically, water. He blogged on the topic and published effectively the same argument as an op-ed in one of the daily papers (I forget which); and then?

But the price of this is that people will despise their corner dairies and resent their rich neighbours, who will in turn be suspicious of them.

This. We love our corner dairy for their behaviour in both earthquakes. We will preferentially use them for little things, rather than going down?

This is one of Eric's points: society punishes vendors much more harshly for gouging in order to maintain supply than for running out. I see this as a beneficial reflection of social cohesion; pro-gougers sees this as inefficient.?

And in extremis form lynchmobs, the prevention of which is basically the State's reason for existence.

Price gouging takes us back to the State?

it draws a distinction between those below and above the newly-established price margin which dispels the illusion of shared experience

I think the argument with?

Oi! Shuddup! *I'm* the Hobbesian around here.

But seriously though, I've always thought a lot of the civil society stuff was fluff compared with black and white lines of?

How is people freely choosing to allocate resources according to exchange criteria of their own choosing not a free market?

I was specifically using the word market to mean resource allocation based on price signals.

Can't have a market without trade. It's not trading if you don't ask for anything?

http://www.yesmagazine.org/issues/a-resilient-community/in-new-orleans-kindness-trumped-chaos

Totally. A strong economic argument for not gouging is, ?If I price in all the demand signals (gouge, in the layman?s English), it?s entirely possible that those who are now priced out of the market, or who feel that their own needs are not served?

What is more obscene though is that most (all?) economists we hear from have vested interests in the policies they propose. I'd have much more trust in an unemployed economist on the DPB talking about the value of?

I've always found it better to translate this as

"we expect people to be selfish untrustworthy bastards, like us"

I find it quite amusing when real people fool economists by being generous altruistic and ... nice

What about them?

Demand is elastic. Under normal circumstances, these people are okay. If someone wants to watch the rugby, they can pay for it, because they have other options for entertainment, like watching it on television, seeing a lower division match, or spending their entertainment dollars elsewhere.

Food demand?

There are a bunch of businesses that have a?

Same reason that free-market healthcare is such an abominable concept.

Yes, and because most states are not prepared to have citizens dying on the street, even in developing countries and the United States, there is a provider of last resort, offering very poor service but sufficient to keep most people?

gouging on an essential service is seen in a highly negative light.

And the opposite, offering an essential service at highly reduced rates, as Air New Zealand did with their $50 fares to and from Christchurch, is seen in an incredibly positive light. It increases the tendency of people to?

They are not full of shit. They are asking a vital question: If there's a fixed amount of resources, how do we distribute it? It's a difficult question because sometimes, there's just not enough to go around. Somebody?

Sadly, the economists whose thinking has shaped much of the developed world's functioning for the last couple of decades have, it seems, considered "fairness, morality, and being?

It's even possible to explain the anti-gouging tendency in Chch using "classic" theory, you just have to take?

Sure about that? I reckon there are some chippies who're busy hunting for a hammer :P

Not here, but elsewhere

I live in Dunedin, milk and bread are being rationed in our supermarkets?

Not yet. But they raise the risk, and if price gouging for essentials becomes common, then non-market resource allocation solutions (AKA "stealing") and non-State justice solutions (AKA "lynching") start to look like?

Mr Heap said the shop had not tried to take advantage of the demand for essential goods.

"There's certainly been no tampering of prices in terms of putting it up knowing that people are going to buy?

If the were gouging they'd leave a few in Dunedin and bump the prices there too

I think the problem with many economists (and the reason why they are so publicly disparaged, despite being engaged in a vital inquiry) is precisely that they?

Actually, I'd take issue with this. To the extent that they are predicated on unstated assumptions of ethical egoism – that people should do whatever is in their best interests, and screw everyone else – then that is exactly what?

Yup that's quite true. And of course you are right there are moral, decent economists.

However the vast majority have been taught that because in any society there are arseholes who will rip you off the logical solution is to assume everyone is an?

Not only is that their first assumption, their actions are based on the same assumption. Witness the WWG, whose entire predicate is that there is nobody receiving a benefit who?

The whole disabilty support system is based on spending huge amounts to ration and monitor spending; funds that could be better used actually providing support services and opportunities for decent?

Do you think Keith that you could keep the English language more accurate and less offensive, by using "mess" and "messing" instead of the f.... words above.

L

Hate to break it to you, but that's how Keith rolls and he's not alone. The 'f' word is commonplace on PAS.

And the answer is always shit – but that's just because the question was shitty to begin with. If there's not enough, *someone* will have to miss?

I think people are much more accepting of the notion that each builder has a fixed supply of buildering and what they're doing is bribing their builder to work more and rest less. Call it "overtime pay" if you?

i would question that it is a profession.

that is a little too close to regarding economics a science. when in fact is a social science

Also, Eric Crampton himself?

At this point I think it?s been a week of things being well?messed up.
There?s a certain absent emotive content in that construction.
ETA: snap other people. stupid refresh.

1. If people are behaving irrationally now (petrol hording when long run shortages are unlikely) what's to make him think they'll respond rationally to price signals? (i.e consume less petrol rather than focus their ire on petrol station owners,?

I'd suggest that's more a function of the profession's lack of transparency about those assumptions – and it often seems to have some pretty big?

Kinda like paleontology?

Say, biosphere constraints – known for decades but ignored by most economists in favour of assumed perpetual unlimited growth in?

There is a shortage of milk.

i) Two piles of milk of the same size; the first pile is in a courtyard surrounded by other people, the second pile is in a room where no one can see you leave or how much you?

It's not as explicitly normative as you put?

And evolutionary science. 8-)

Hmm. I'm a little torn about this. I know some people are offended, but on the other hand, I use these words specifically?

You're possibly conflating 'know' with 'act'. Deciding which information gets acted on is a political process. Economists are not immune from that.

First hording occurs because people can see?

And the electorate need to know the contextualised implications of the (suppressed) information. Who's fulfilling that role?

1. If people are behaving irrationally now (petrol hording when long run shortages are unlikely) what?s to make him think they?ll respond rationally to price signals?

There is nothing irrational about hording in shortage – quite the opposite. If people anticipate future shortage then hording now is an?

Given the perceived (if not actual) need for having fuel as soon as possible, I don?t believe many would?

It?s not a supply side issue. Knowledge of price differences would be pretty hard to disseminate. And supply is pretty inelastic as well given the short time-frame we are talking about.

Why not? An arbitrageur need know only two things: a) the going rate for petrol in Christchurch, and?

Funny how that part is usually not done, eh.

The objections to Crampton's neolib wet dream have been more than adequately canvassed above. For you to say: "for each litre of petrol not?

Uh, I believe you raised 'the electorate' specifically. I'm open to politics meaning other stakeholders too and interests larger than that of the state. It's often shareholders we hear about rather than citizens anyway.

And just exactly how are going to arbitrage? You can't arbitrage between petrol stations unless you own a minitanker and the station owner trusts your dodgy scrawled note?

If you need to get across town to check on your family, you will do it, whatever the cost.

I agree – but you might not do it in a car if petrol is very costly – you might be more inclined to hitch a ride, or borrow a?

Practically speaking, how is that information going to be disseminated? There are no phone lines/limited mobile coverage, no power, no internet access.

Mobile phones worked throughout the crisis in many parts of Christchurch, if spottily.

And just exactly how are going to arbitrage? You can?t arbitrage between petrol stations?

Oh I see. You're the type to get personal and call names.

Ok – I'm not completely up on the news here. But isn't the fact of the matter that petrol isn't actually going to run out? and?

That's not the only source of inequality. It could come down to who is lucky enough to get to the shop first.

Seriously, you are suggesting that people would use their battery power on finding out where the cheapest petrol is?

What is so hard to believe about people who have mobile tankers using them in a crisis to?

I'm sure it would all be worth it so that Hayek, Rand, Brash and others of our betters could rest easier knowing that the invisible hand is shafting the right folk unimpeded.

I just realised. The minitanker availability is a non-issue because

Hoarders = arbitrageurs

Problem solved.

Actually, that's not a terribly onerous limitation. Petrol is not a highly-controlled transportable substance. Had I renewed it (I didn't because of cost and a lack of need), my one-day 'D' endorsement course and?

You being disingenuous.

No I'm not suggesting that. As I said, gasoline coming from Kaikoura to Christchurch, not Merivale to Dallington, or whatever. If prices spike, no phone calls are required?

I can assure you there is no religion that has as an article?

T-shirt.

Yes, there are many petrol companies operating there, and getting petrol to Christchurch on short notice is exactly what they are doing. They already?

Russell, this is not difficult stuff. As you are no doubt aware another key resource in a disaster is ice. A couple of years ago a hurricane?

fuck-all impact

Ahem. *Mess*-all impact, if you please.

I wonder if it's a case of deny any goodness whatsoever to dirty filthy higher prices, no matter?

I can't follow either the argument or the?

So suppose you are a consumer and your local petrol station ups the price to $4. You know that there are two or three other stations within 5 km radius of your home. How?

If the idea is that prices are the most efficient way of finding out who really needs the stuff; and if you need a govt subsidised work around to make sure?

What is so special about the ex ante price though?

While not everyone agrees that the ex ante price is fair, I don't see anyone arguing that it is too low. So what is special about it is that any higher price will appear to be profiting from other peoples'?

http://www.youtube.com/watch?v=1XIyRP3D_d8

L

Well, if you can sell the petrol for a very modest $1 per litre markup from retail and assuming the tanker carries around 30,000 litres, you'd make $30,000 gross.

I have no idea how much it costs to hire a tanker plus a driver, but let's?

Finally figured out the concept I've been looking for this whole time: Income elasticity of demand. aka Rich people can pay more, and we have a?

First hording occurs because people can see the market is not being allowed to clear and they correctly foresee shortage occurring.

People hoard if they *expect* a shortage. They cannot know, when they are?

Not really – it still centres around an ignorant conflation of need with ability to pay – that everyone who needs something is magically able to pay whatever price the market dictates. A fantasy level playing field. Eric?

pretty good summary

Exacery. Economics has some pretty good maths to deal with cases such as those you describe but human behaviour sometime messes up the maths entirely, those damn humans and there behaviour without them economics would be perfect.

But for now the science of economics?

[ducks]

[cloak]

And since you ask, yes, I am still missing Ian D.

Wow. This is kind of impressive. So you're advocating using tax dollars to allow price gougers to get rich. You'd be happy?

Yes I'm quite sure the modeling shows that. How about you go away and?

The top one was;

?Taxes go retro?.

They meant taxis, but I think in light of some of the above, there is a distinct possibility they will have to re-use this, along with;

?Carless days back to the future?.?

My, you really are taking the channelling-Ian thing seriously :)

Metaphorically.

I think some analysis on his part, rather than supposition, would find that some people can afford more expensive child seats, which has no relevance to how safe the various seats are, nor how much people value their children?s safety

Indeed. Car seats are a poor example, because all car?

That's actually a good question. My first reaction is no, since?

Most likely he is still blowing on his pie...

Could someone confirm or deny that once a Government has called an election they cannot bring in?

Even if they can't, Key hasn't called the election. He's just announced the date, which is not the same thing. There's a whole procedural rigmarole to call the election, with writs,?

We're at the first step – The PM has made an announcement. Parliament continues to sit and new legislation can be introduced and passed and all that until Parliament is dissolved, which is still at some point in the relatively distant future – mid/latish October.

That one's a showstopper if you want any credible claim for concern about the welfare of the poor. The rest of your musings about pricing in fantasyland are just white noise.

To solve the problem of a brief (and possibly non-existent and probably irrational) shortage in which selection was?

If it were a reasonably necessary or expedient step to assist?

Yes. In this case, the free market method does not work. Any economist could tell you that, and at least one has when he made this thread.

No economist I know has any interest in defending the rich.

Gavyn Davies? Although ironically he's on the left of his profession. It's the kids in their first year at Treasury on $50k a year that are the wildest neo-libs.

Petrol and diesel prices are on the up – but not in Christchurch.

BP and Mobil have increased petrol and diesel by 5 cents a litre, Caltex has increased 91 octane by 6 cents a litre, and Shell will introduce its increase tonight.

However, reacting?

Fear not. Legions of arbitragers will sort it out, driving down to Christchurch to get us our cheaper fuel.

http://www.youtube.com/watch?v=sx7XNb3Q9Ek

IANAL, but 6(4) is an example of what the power in 6(1) "may"?

Lol. Ben brought the funny.

orders in council are still subject to judicial review.

Yeah, there's probably a need to distinguish between a judicial review of an administrative decision and a review of an Order in Council that concludes it is ultra vires (and therefore?

Sometimes PR works to the benefit of consumers. In this case, the oil companies want to be seen to be doing their bit for Christchurch. Somewhat ironically, this the market at work – not wanting to destroy goodwill (and thus future sales) for the sake of short-term?

Quite. But Dismal makes a useful point. This is the market working in the real world ? where goodwill?

Corporates are still run by people, and they do often want to do the right thing rather than just maximise profit at all costs (or even making PR calculations about future goodwill). I?