Exactly. Forcing supply below demand through zoning restrictions does help, but once speculation begins this hurts supply also.
It amazes me on HN where on most other complex behavioural problems if someone came along and shouted "it's because of X" they would be laughed out to cries of "it's more complicated than just one thing".
Yet when it comes to millions of people with varying priorities interacting with government and the banks anyone who comes up with anything more complex than "it's supply and demand" is told "no, I've done econ 101 thank you".
Hacker news can't be bothered with Georgism, they've done econ 101 syllabus (provided by their establishment).
Like what exactly? Much of this requires large scale policies. Without those, the lowering of demand lowers prices and allows others to increase their consumption. The vast majority people aren't going to voluntarily reduce their quality of living. Thus it will likely happen when the resources are expended and it's too late.
Indeed. The only levers government has is to subsidize demand and restrict supply, both of which have the effect of increasing prices and making life less affordable.
The problem is inherent to central planning, because central planning is unable to deal with the local complexities of a problem.
For example, during the gas crisis around 1980, the Dept of Energy was empowered to determine the gas allocation for every station in the country. The allocation was based on the previous year's markets. This was well-intentioned, but it did not take into account the fact that markets change constantly. The result was stations with gluts and stations with shortages.
Mental laziness is probably best. The common argument is that the costs to curtail are so enormous that it is not worth attempting or that we would be denying quality of life to up-and-coming economies.
My point is that it is easier to deny than work towards finding a solution.
Perhaps part of the problem is our desire to bundle solutions into grand theories, like supply-side economics or Marxism? I agree that we can beat a horse over and over again until there's nothing left to see, but small changes are how the world actually works. I can say "lowering taxes on producers of x can stimulate growth" or "increased public investment in industry y will resolve the problems it currently experiences" and those things occur all the time. But they also don't sell books.
EDIT: Perhaps a better way of stating this is our desire to package academically useful economic models into grand policy solutions.
Supply and demand. Much like the various ecological simulations of predator/prey or food/consumer.
So if you have an economy that only has space for 90M people as participants yet have 100M population, you've got a very big problem. Immigration, starvation, revolution, they'll find something to do. Or if they're mellow they'll just sit out the supposed societal mandates, after all, what else could they do?
A lot of these seem like systems thinking problems, rather than pure economics. Tackling it across multiple perspectives might not even result in a satisfactory answer for any party, but it can improve the situation.
It seems all too frequent that this is the outcome of many things in the US. Like universities and healthcare. More and more money becomes less and less effective. When there's so much demand and so little supply, it seems the suppliers of things (e.g. effective governing) care lesser the more it's demanded.
No, the post you responded to says that density without strict oversight leads to all the bad things you were talking about. I cannot think of a counterexample.
Density with strict oversight seems like it could lead to a flourishing society, which is what has happened in those other examples.
It's very easy to have density with strict oversight lead to bad results, but some form of strict oversight seems like a prerequisite to prosperous density. Anything else it seems like you're reading what you want to read out of the statement.
1. When this gets too extreme people start to ignore whether it is fair, logical or right, and respond with rage. People who have to close down, or feel poor, while they see a small group get crazy rich don’t care about economic theory, they just feel that something is wrong. Politicians use that rage to get elected and ‘fight for the people’, often implementing harmful policies to please angry crowds.
2. Australia has minimized this problem pretty well by having a pretty unregulated economy but a robust safety net.
Many government policies could be seen as "social engineering", be they farm subsidies, tariffs on imports, spending on things like highways, subsidized communication networks like the postal system, education for people other than those born wealthy, meals for poor kids so that they have something in their stomachs at school and can actually try and think, and so on.
And, yes, some of them get 'routed around'. Other policies, whether you agree with them or not, affect the market more than the other way around. For an extreme example, see Cuba, where social engineering routed the market, with results that are disastrous in many ways. Other social engineering experiments, such as universal education up to a certain age in most western countries, seem to have been a net positive for society, even if they are imperfect.
Also, I think that some "social engineering", such as keeping people from starving to death, and ensuring they don't freeze to death for want of a warm place to sleep, at a minimum, should not be routed around.
I'm interested in understanding the real basis for the underlying cause (and spoiler, I don't think the thinly-veneered idea that planning is too regulated is the answer)
What's weird is that this article says basically "I assumed it's because there is too much regulation but actually it turns out there is less than all these richer countries! Guess there's not any point in exploring that any further."
You can either solve the problem with money, or you can change human behavior with regulatory burden that ultimately depends on force.
I'd think you're way better off just solving the problem. Someone else called this "solutionism." Well, this article makes an exceptionally good case that the amount of input cost justifies the output economic activity by more than order of magnitude... so with this in hand, what would the justification be for forcing unnecessary changes in human behavior?
Yes, but unrealistic measures won't motivate people to make the necessary changes. There are costs people will pay and ones they won't. You're not going to care much about the future if your kids go hungry now because there are no jobs. Particularly when it's based on a future prediction that might turn out differently.
One theory here is that it is easy to predict basic needs for a population, and thus let the government control the production of those - food, shelter, medicine, etc. For an extremely simplified example, you have 1 billion people in China, so you need to build 1 billion housing units. That is going to keep a lot of people very busy for 20+ years.
Once the general population's needs move beyond basic necessities, it becomes much harder for a central authority to predict what will be needed by it's citizens. Services, entertainment, and consumer goods are all highly dependent on many more variables than shelter and food are.
It amazes me on HN where on most other complex behavioural problems if someone came along and shouted "it's because of X" they would be laughed out to cries of "it's more complicated than just one thing".
Yet when it comes to millions of people with varying priorities interacting with government and the banks anyone who comes up with anything more complex than "it's supply and demand" is told "no, I've done econ 101 thank you".
Hacker news can't be bothered with Georgism, they've done econ 101 syllabus (provided by their establishment).
https://www.amazon.com/Progress-Poverty-Industrial-Depressio...
reply