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How to fix the economy (lemmy.world)
submitted 3 days ago by The_Picard_Maneuver@lemmy.world to c/curatedtumblr@sh.itjust.works
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[–] Banana@sh.itjust.works 8 points 3 days ago (2 children)

Definitely not. The rules behind supply and demand hinge on some extremely flimsy assumptions, namely:

  • that people always act in their own best interest (they fucking don't)
  • that people can actually choose not to buy the product

For things like food, housing, medicine, etc. People don't get the luxury of voting with their wallets, and this is why the free market cannot allocate resources effectively.

Just because I went to school for economics does not mean I am a free market capitalist. I'm definitely not.

[–] konki@lemmy.one 3 points 2 days ago (1 children)
  • that people always act in their own best interest (they fucking don't)

Totally agree

  • that people can actually choose not to buy the product

This is actually pretty well deacrived by what's called the price elasticity of demand in standard neoclassical models. For things like housing one might say that the demand is very inellastic: A change in price does not affect the quatity demanded.

[–] Banana@sh.itjust.works 1 points 2 days ago

Yes exactly. This is why I find it funny when they use two different, yet contradictory reasons to justify the sin tax:

  • it prevents people from using it because they'll choose not to use it (the thing they're addicted to) if it gets too expensive; and,
  • the demand is very inelastic which means the government will make more revenue

When really they're primarily taxing the things poor people are addicted to.

Idk, I'm generalizing, I'm just kind of pointing out how a lot of the supports capitalism rests on are weird little opaque excuses to convince the masses that exploitation is what's best for us

So many economists are stuck in a box of what our society has been, they can't think past our current rules and regulations to what could be, because they think that the rules and trends they learn in school are the only possibility, or that profit must be king.

[–] peoplebeproblems@midwest.social 2 points 3 days ago

Ah ok, I see the flaw in my thinking.

Things that are always in demand don't drive a price solely based on supply, and since people don't act in their own best interest the actual demand of something can't be a useful way to determine the value of a thing.

So that sort of says to me that with a truly free market economy, it would be just as impossible to model future prices because of the inherent unpredictability of humans.