Epic Cluelessness | Tom Woods

You know how some people are so clueless they have no idea how clueless they are? Bob Murphy just wrote to me about a critic of his most recent video:

Someone posted a comment on my Hurricane price controls YouTube, quoting the relevant legal statutes outlawing price gouging. He had left other comments saying how dumb my video was. I think his point was, “This video is stupid, because it is illegal for prices to go up like this economist is advocating.”

Naturally Bob’s point is that those laws are foolish and counterproductive, so it’s no argument against Bob to go listing the relevant laws.

I’m sure you guys can actually appreciate Bob’s video, so here it is:

Anonymous

Yay! I can now hear Bob in both channels and without interference.

I’ve actually been following the discourse on this topic. I wish that my arguments were better, but Bob’s video is a summation of my understanding of this particular topic. It seems that many people still don’t understand prices and economic calculation. It’s almost as if the established laws of economics are relegated to the dustbin of cultural normalism, whereby new theories are established to replace the old, without actually disproving such theories.

I don’t know, but it seems to me that if something is generally considered to be a “law” of economics, it might make sense that you at least consider it in your analysis. Our “intellectual” opponents will have none of this, of course. Consistency is their ‘Achilles Heel’.
http://www.facebook.com/people/William-Schooler/100003032488972 William Schooler

Let me please be one of the clueless since I entirely disagree because supply and demand can be manipulated as we have seen with gas prices for years and theft has meaning as well. We talk like our system is prosperous and joyful and its not at all. Poor products are produced, supply and demand manipulated and these are obvious but we can deny them all day if we decide to.

Simply put price increases to handle supply demand are totally just but when it is purely for excess profit because you are able to steel it is a little more of a lie to self. But go ahead and convince yourself any act is justifiable and then look around you and ask why there is so much theft in the world. Is it someone else’s thinking? Or is it thinking versus knowing what your product is and how to sustain and grow yourself by demand?

It is funny to me why so many of us are clueless yet we sustain very well and for that reason I am glad to be so clueless.
Jeremy

Yes, you are certainly one of the clueless. Congratulations.

And yes, it is always more emotionally satisfying to be ignorant. I have sadly met more than my fair share of them.
guest

No one is entitled to the gas supply. It belongs to individuals who are selling it.

Since it belongs to them, they are entitled to sell it at whatever price they like. And if gas stations just refuse to sell at all, that’s their right, too.

Government, through price controls, has once again made people poorer for getting involved in the economy.

The real problem with the economy is fiat money:

Neoconservative David Frum Hearts the Fed
http://www.youtube.com/watch?v=1d1rcaX-lzU
Dither

More than once during this ordeal, I have face-palmed while reading comments posted below stories about the gas lines. “At least they aren’t raising prices,” commented one woman, who went on to say that she had already reported one gas station for what was a very modest price increase. The clueless public and their elected thugs are upset about gas lines but remain steadfastly determined to stamp out the one thing that would have kept shortages at bay.

The sad part is, Murphy’s argument here is not even controversial among economists. Even the left-winger Matt Yglesias, who is wrong about almost everything, has figured out that so-called “anti-gouging” laws are harmful to the very people they are intended to help. (Don’t expect him to apply the same reasoning to other areas of the economy, however.)
Dither

“In fact, pricing on the market is not an act of will by sellers. Businessmen do not determine their selling prices on the basis of whether they feel greedy or ‘responsible’ that morning. The entire apparatus of economic theory, built up over centuries, is devoted to demonstrating a great truth: that prices are set only by the demand of purchasers (how much of a good or service purchasers will buy at any given price), and by the supply or stock of the good…

“The general public, media pundits, politicians, and even some businessmen, seem to have a mechanistic, cost-plus model of ‘just’ pricing in their heads. It is all right, they concede, for each businessman to pay his costs of production and then add on some ‘reasonable’ markup; but any price beyond that is morally condemned as excessive ‘greed.’ But cost of production has no direct influence on price; prices are only determined by supply and demand.

“Assume, for example, that manna from heaven, an extremely valuable product, falls on some piece of land in New Jersey. The manna (extremely scarce and useful) will command a high price even though its ‘cost’ to the landowner was zero (or is limited to the costs of advertising and marketing his find). There is no guaranteed profit margin on the free market. A businessman may find that he can only sell his product below his costs, and thereby suffer losses; or that he can sell above costs, and enjoy a profit. The better he forecasts, the more profit he makes.”

—Murray Rothbard, 1995
Robert Roddis

Mike Norman of the “modern monetary theory” and his other bloggers on his web site insist that the regime of anti-gouging price controls is the free market. Mike Norman is often on TV. He is beyond epic.

http://tinyurl.com/a28yvh8
Jeremy

Oh what the heck. At least read this:

Murray Rothbard on “Greed” and Price “Gouging”
http://www.economicpolicyjournal.com/2012/11/murray-rothbard-on-greed-and-price.html
JFF

It seems to me that people would like to have their cake, to eat it, plus the bowl of left over frosting, whilst retaining all of the original ingredients and keeping the oven off.
Jeremy

I agree. Maybe many people have simply just become spoiled brats? Not sure.
Mike

Something changed – there was a storm and power is down. Some gas stations don’t work because lack of power. If there was a generator, you can buy it or borrow get and run – but it’s costly to do so. And noone is paying as I presume? Another way price controls make things worse…
Robert Roddis

Mike Norman and the MMT guys double down on declaring that the anti-gouging price control regime is the “free market”. This actually explains the logic and factual trail they follow in coming to their “monetary” theories. I think that they think that they are hurting our feelings.

theories.http://mikenormaneconomics.blogspot.com/2012/11/le-folies-du-market-liberte-officials.html
Franklin

When one remains clueless, one depends on the omniscient government who shall allocate fairness as the government sees fit. And you are required to smile and accept it. After all, you are clueless,
If a different disaster occurs, one that impacts the trade or commercial environment in which you engage for your livelihood, and the government orders you to provide goods and services as the government agency dictates, never complain, because the strangers with police badges are controlling you for your and others’ own good. They are not committing theft against you. If you feel, in such a case, that your property is being grabbed and manipulated, or you cannot charge for your services as you wish, feel free to request a committee hearing. When we can get around to it.
http://www.facebook.com/people/William-Schooler/100003032488972 William Schooler

Thank you all for you responses, truly I am clueless and you all know it all. Except you live in this country also and well its not that successful unless of course you are lying to yourself then by goodness it is prospering. We can all run around and blame everyone else all day long but the mirror does not lie.

Demand like all things is something you create, it doesn’t fall out of the sky unless you are from Harvard then by all means. Money is simply an representation, sustainment is an act of knowing what that is and producing to that level. But go ahead and keep telling me I am wrong, LOL. And good luck to you and this bad 5000 year old idea you keep holding on to, truly it is amusing.

For the record I don’t think anyone is entitled to a thing accept LIFE, LIBERTY and the ability to Pursue happiness. This comes at birth without your permission but you go ahead and keep attempting to control it.
Anonymous

A price gouging ban doesn’t actually prevent the price of gasoline from rising. The ban only entitles first comers to buy gas below the market price, Thereafter, these people hold the gas rather than reselling it at the statutory price, which is equivalent to offering it at an infinite price.

If the ban requires everyone to sell at the statutory price, the person next in line after the last gallon is sold can require the person who just bought gas to resell it. For that matter, everyone in line, expecting the tank soon to run dry, can require people ahead of them in line to resell their gas, so this policy only forces late comers to subsidize early comers.
http://www.facebook.com/people/William-Schooler/100003032488972 William Schooler

Whats wrong with price controls based completely on the demand you create for yourself? Knowing your product, knowing what it takes to sustain and growing demand as high as you are willing to create it. Some products are not this good are they? Some with limited resource manipulate the supply to manipulate demand and has nothing to do with demand creation does it?