[RD] Economics people, please explain this to me.

Look at the TVs that you can get for ~150€ market price these days. Those are things that would have been luxury products for rich people a decade or so ago. When you buy while an Entertainment Show throws out their old stuff to make space for a new generation, you can sometimes get large flat screen TVs for below 100€. That's insane if you look at it through the eyes of a person living 10 years in the past.

Yeah but try and get hold of a decent CRT TV. Prices are only going up there.
 
I keep hearing stuff like this from libertarians. It's obviously false, but I don't know how to explain why.

If you are an American it is a pretty great time to be alive. My father got out a bunch of pictures for me Wednesday. One showed my grandmother as a girl of about 8. She was at school, with the rest of her classmates(6 or 7, all ages, but none older than 14), in coats(it was winter) in front of the wood burning furnace and the very young man that would serve as the teacher for about 10 miles. One of her parents was a dentist. He quit, and choose to be a farmer in those conditions because it paid better. They had an absurdly wonderful outhouse growing up, very luxurious and high status. It was a point of pride. My house is a ~150 year old coverted barn. It's worth crap(for a house, by the numbers I generally see discussed here). It's in a low status real estate market where prices and the job market are not looking future bright. I poop inside in the heat when it's -20 with wind chill. Standards change, not universally, and not fairly, but if I pick up a needle and sew and prick myself, odds of my dying from blood poisoning are very low. That was not the case for my grandmother's mother. If I do give myself blood poisoning, the recommended best treatment is not amputation.

Edit: you know, now that I think about it, he wanted to get those photos out because he's decided that as I slide less-than-gracefully into middle age, that I look like my grandfather's older brother. He's not wrong. Photos of that great uncle end in his mid 40s when he dropped dead of diabetes. Figured that ties in with the point just as well.
 
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I keep hearing stuff like this from libertarians. It's obviously false, but I don't know how to explain why.

Since when is Ben Shapiro a libertarian? I can explain a few reasons why Shapiro's article there is silly but it might get into "the rich keep the plebs in their place" territory and you said you wouldn't respond to posts that included such...uh...nonsense.

Rent seeking is a real thing, it's effects are felt in almost all industries (even competitive ones), and thus the assumptions made in the naive Austrian and Neo-classical models which predict the price of a good should drop to its marginal cost are almost never true in the real world.

It's not just a real thing, it's the entire organizing principle of capitalism and it's why free markets that reduce prices to near the cost of production require socialism.

On a personal note, the Austrian School are the anti-vaxxers of the economics world.

Still, they're sometimes preferable to the neoclassicals, who believe that you can say useful things about the economy with models that ignore credit.
 
Since when is Ben Shapiro a libertarian? I can explain a few reasons why Shapiro's article there is silly but it might get into "the rich keep the plebs in their place" territory and you said you wouldn't respond to posts that included such...uh...nonsense.

Well, I'm more against the idea of some organized conspiracy against the poor than some price-fixing or collusion.
 
I dunno how to respond to this or what you mean exactly

I'm okay with claims that the economy is structurally designed to cater to the wealthy. I'm not okay with claims that the entire economy is a conspiracy to keep the poor in line.

(Several people claimed that the last time I asked this question, IIRC.)
 
I'm okay with claims that the economy is structurally designed to cater to the wealthy. I'm not okay with claims that the entire economy is a conspiracy to keep the poor in line.
Commodities do get cheaper over time, but the same competitive forces that suppress prices also suppress wages (that is, real wages), so the spending-power of the average worker doesn't increase quickly enough to guarantee access to these commodities, and may in fact decrease, making certain commodities- you mentioned housing- less rather than more accessible.

Employers would, collectively, quite like wages to increase, because that would increase the purchasing power of their consumers, while also driving up the costs for their competitors. They just don't want these increases to apply to their worker, and they're not going to be the first to blink unless something forces them to. Ford's famous five-dollars-a-day was a panicked response to an unsustainable level of employee turnover, that was only retroactively framed as an improbable combination of patrician grace and business savvy.

No conspiracy required.
 
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If warehousing for Amazon paid 50 grand a year with an HMO plan, it would be a solid family supporting job. I'd do it at that rate. Minus debt, I think you could have a full time parent and decent living arrangements for that. But it doesn't pay that rate. Now, I guess we need to decide if we want to consider the customers Amazon caters to as "wealthy." I could see arguments either way, particularly as you expand the view to the Amazon distribution chain outside of the states.
 
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Planned obsolescence is a huge thing in electronics. I guess it's cheaper to design a device that will break in five years than to design one that lasts.

That isn't an example of planned obsolescence, it's more in line with practical manufacturing/picking sensible cost option.

Planned obsolescence does happen, and is more common with stuff that could in principle last decades but isn't designed to do so. Something like a fridge is more likely than a phone, which is likely to become obsolete in a sense even before it breaks.
 
I was under the impression that the Austrian school of Economics was largely discredited and no longer used because it doesn't really work.

That would perhaps explain why things it predicts aren't happening?

Heh, it was never used.
 
Then why can't people on minimum wage get a small house?


People can't get a small house because there is more money to be made in building large houses. So large houses hog up all the available land where poor people need to live.


One thing to remember is that cars are legally subject to ever increasing regulation for build quality, safety, and emissions. When you get a new car (in the US) it's legally required to have seat belts, air bags, crumple zones, catalytic converters, tire pressure monitoring systems, anti-lock brakes, traction control systems, etc. etc. etc. All these additional features cost money, in direct cost, cost to develop, and cost to validate and certify.

As a result of these features hundreds of thousands of people have not died.


And this added expense is probably the primary reason why Republicans rail against regulations meant to increase fuel efficiency and to a lesser extent, safety systems in cars. It doesn't matter to them if a reduction in smog saves X thousands of lives a year if it means profits might go down some fraction for the manufacturers.


:nope: :cringe: :nono:

You guys didn't read Bamspeedy's post.


How much do you think a Model T would cost in today's world if factories were set up to mass produce them?
Obviously it would be expensive for you to build one yourself by getting specialty parts, but a factory that produces all those parts themselves (and would be producing millions of them).
$850 in 1909 dollars is $22,000 in 2012. I'm sure factories set up for it could produce Model Ts for alot less than $22,000, perhaps more like $2,200. But of course it wouldn't have the safety features required for today's world.

But I don't think anyone ever claimed that even the poorest of the poor could have Model T's 50-100 years later.


Think that one through: I recently bought a 2016 Subaru new. I paid about $22,000 (sticker price $24k and change). My car has a very high safety rating, meets all new safety and environmental regulations, is faster, more comfortable, more durable, more reliable, more capable, essentially better in every possible respect than the designers of the Model T even imagined would some day be possible.

And I paid for it essentially the same as a person buying a Model T in 1909 would have paid.

All of those regulations, all of those improvements, cost me nothing. All those governmental interferences in the marketplace, cost me nothing. In inflation adjusted dollars, I got an inconceivably better machine for the same money.



As long it isn't something major (engine, transmission, etc.) depreciation of a new car usually costs more than repairs on an older car. Of course if the repairs end up affecting your job, then that can change things.....
The poor will get rid of their 20 year old car for a 10 year old car and enjoy the technological progress cars have made in that 10 year period, even if they are still 10 years behind the rich people.


"Depreciation" of a new car is essentially just the price of putting it back on the market against new cars. Doesn't matter if you aren't trading regularly. But an old car can easily cost more to repair than it can fetch as a sale price.



I keep hearing stuff like this from libertarians. It's obviously false, but I don't know how to explain why.


That article is referring to the improving of technology. Which is ongoing, although most of the time incremental and not dramatically visible. And from that perspective he is right. But that article also leaves out a great many things. And a pure 'free market' as he seems to be advocating, has a lot of downsides that the technical changes in consumer goods doesn't account for.


I was under the impression that the Austrian school of Economics was largely discredited and no longer used because it doesn't really work.

That would perhaps explain why things it predicts aren't happening?


The Austrian School hasn't added anything to the discussion and understanding of economics at any point within the careers of any living Austrian economist. Keep that in mind: No Austrian economist alive today has made a contribution to the discipline of economics. Not a one. Hayek was the last useful Austrian, and he left that for the Chicago School over 70 years ago. No one who is worth anything in economics now is an Austrian. And no one who is an Austrian is worth anything in economics. Today it's just a branch of hard conservative/authoritarian politics.
 
People can't get a small house because there is more money to be made in building large houses. So large houses hog up all the available land where poor people need to live.

Similarly, rich people are taking up more space on airplanes, more time talking to medical professionals, etc, etc. The misallocation of resources driven by inequality leads to incredible waste.
 
I keep hearing stuff like this from libertarians. It's obviously false, but I don't know how to explain why.
"2018 is amazing, I got to use google, twitter, my phone, and OTC drugs before my personal security detail took me away"
 
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