Markets interpret social engineering as damage and route around it.
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.
Governments, when they want to, are perfectly capable of interfering with markets and even destroying them. I am not a libertarian and do not believe that all intervention is harmful, but disagree with your thesis that markets are able to route around governments. Yes, in some cases, but I think that governments have the upper hand: they have guns and police and stuff, like the libertarians love to say.
I think the "law of unintended consequences" is perhaps more solid ground with regards to governments and market manipulation.
I wasn't claiming, incidentally, that markets were totally immune to government interference-- just as networks are not immune to damage. Just that markets will always find whatever room you give them.
In Colombia, 4.5 kg of coca paste, which will yield about one kilo of cocaine, fetches about $4,500. On the streets of the United States, selling this kilogram of cocaine will earn between $200,000 and $600,000. (http://www.colombiajournal.org/colombia150.htm)
Claritin 10 mg Consumer Price (100 tablets): $215.17 Cost of general active ingredients: $0.71 (http://www.rense.com/general54/preco.htm) normalized to 1 kilo ... cost $71,000, value $21517000.00
what did we bet again? :)
Your math is off by a few orders of magniture. 100x10mg = 1g, so 1 kg should be 1000x$215.17 = $215,170.00, for an ingredient cost of 1000x$.71 = $710.
Also, I can buy 100 x 10mg Clarityn for $65, but I won't, because I can get 100 x 10mg Mildin (exact same active ingredient) for $35.
Edit: Oops, forgot to add a point.
Your point holds true, your calculations are just for 100 kg instead. Thing is, medicine isn't invented, manufactured sold or bought in a free market. Another difference between Clarityn and coke is that there is a very elaborate framework in place to make sure your pills are good - if your dealer dilutes your coke with flour or ratpoison, you're screwed and nobody cares. If there was no demand/requirement for that protection, I'm sure we could get our pills for around $1.
It's ridiculous how obsessed people are with face value even when it's arbitrary and doesn't really mean anything; it gives them a sense of fairness.
Also, venues have incentive to sell out as higher margins are associated with concessions, alcohol sales and merchandise. Teams might tell the newspapers they hate the secondary market, but in reality, the majority of them love it. Some even cater to it.
IMO rent control is best when it limits how much above inflation you can increase rent per year. At 3.5% over inflation you can basically double the real cost over 20 years, but people can plain ahead and know they will not be forced out next year. The major problems seem to occur when rent suddenly goes up 20 percent with little notice or fall significantly below market.
PS: London and Paris are less developed than Manhattan, but they seem to want to maintain their historic look which limits growth. DC has started building down because they can't increase building height which is extremely expensive.
But rent control is probably not the whole story. I'm not familiar with NYC laws but I'm sure there's a lot of regulatory red tape besides rent control that keeps housing scarce and expensive.
Manhattan: 1.6M people, 23 sq mi, ~70K/sq mi (more than double #1 on the list)
NYC: 8.3M, 305 sq mi, ~27K/sq mi (would be #2 on that list)
NY Metro: 17.8M, 8700 sq mi, 2K/sq mi
So while NY Metro could definitely use more housing, you're talking about CT farmland, the Poconos, Hudson county, etc.
The economist Hernando De Soto http://ild.org.pe/en/home has done studies in many different countries proving this and theorizes that this is one of the main reasons poor countries stay poor.
Disastrous for whom? Compared to what? Cubans have a high literacy rate, high life expectancy, low numbers of extreme poor, etc. Indeed, the country has done much better than similar Caribbean/Latin American states which followed different political paths over the past few decades. The government's actions shouldn't be whitewashed, but nor should Cuba's accomplishments be dismissed with vague platitudes about the glories of the market.
The only country that is worse off in the entire region is Haiti. Probably more than 90% of the population is in extreme poverty. Worse than this Cubans was actually better off than most Europeans before Castro. They may have more doctors per capita now a days, but there is no food and no medicine.
This is completely false. Haiti is indeed much much worse off than the rest of the region, but Cubans have higher purchasing-power parity than Jamaicans, Guatemalans, Nicaraguans, Hondurans, Salvadorans, and perhaps a few others, and the country is generally much more equal most Latin American countries, so the bottom couple of quintiles in Cuba do better than their counterparts in Costa Rica, Panama, etc. (or I believe than poor Mexicans, for that matter)
It's still overall a poor country, and has many social, economic, and political problems—attributable to many factors, including ineffective leadership, widespread corruption, the US trade embargo, etc.—but the claim that all of Cuba's problems are the fault of the turn away from markets is so oversimplified as to just be wrong.
> Cubans was actually better off than most Europeans before Castro
This is bullshit. In the 50s, Cubans did a bit better than Southern and Eastern Europeans, but were significantly behind Western Europe.
Most Cubans were were not very well off in the first half of the century, and incomes (and equality particularly) rose substantially between 1960 and 1989. Then after the fall of the Soviet Union, there was a precipitous economic decline in Cuba between 1989 and about 1993 or 1994, which took 12 years to fully recover from. Present-day Cubans have higher real incomes than they ever did in the past, however.
Listen, I don't really want to have a protracted he-said-she-said about the state of the Cuban economy or the precise definition of "extreme" poverty. My point was merely that davidw's off-hand remarks about the topic were trivializing and unproductive.
No one is starving in Jamaica and most other countries in the region. (While I have not had the pleasure of living in Cuba, I have lived in Jamaica and Panama and travelled extensively in the region. Both have very high levels of education, health etc.)
Cuba was according to 1960 ILO (The International Labour Organization) number 8 world wide for industrial salaries and number 7 for agricultural salaries. While there was not full literacy it had very high rates for the region. Health was also amongst the best in Latin America. For more about this see http://www.fiu.edu/~fcf/cubaprecastro21698.html
Castro has done a great job of selling his miracle revolution. Most of what you hear in hollywood movies and popular press is fabrication and never questioned. Don't believe it.
Rent control here in SF only affects people in older buildings. One of many unintended consequences of this is the ridiculous state of Tenderloin. Back in Denmark where I own an apartment, rent control forces me to only be able to rent it out as a corporate apartment to foreigners. The official rent would pay less than quarter of the mortgage. No wonder it is hard to find a good apartment in Copenhagen.
An example is the market response to the generations of social engineering started as the New Deal, which eventually led us to the very distorted issues we now see in the financial markets.
Another example are the costs of health care in the US, that were caused directly by the deductions for employers created in the 40s.
Instead of an efficient market, where people picked the most efficient insurance for their situation, it became an arms race of who could offer more benefits together with a bureaucracy to make sure their insured (who don't pay directly) don't abuse the system.
Let Richard Branson or any other smart entrepreneur at the health system without the handicap of social engineering and it would be fixed within a year. Rather than fixing it all signs at the moment point towards further regulation and thus further distortion.
The market will always route around social engineering no matter to what limits the regulators attempt to control it. The outcomes are rarely as good as if the market was just left to do its job. Of course when this happens like it has so obviously in the current crisis, people talk about it being the fault of the market run wild and want to bring in more regulation, when the regulation it self was what caused it to go wild in the first place.
Where "fixed" means that unprofitable/poor people die of or are crippled by easily and cheaply treatable diseases. That's what a pure market solution would do. Once you start including those people, it's "social engineering".
There are plenty of products where the market drives prices down, but doesn't make them free or available to everyone, and in most cases that's just fine. Some people and some societies take the view that in some way or another, things like food, shelter, and yes, at least basic health care ought to be available to everyone, even if it is not profitable. That's "social engineering".
Healthcare prices have come way down in the past two decades, the issue is that nobody wants 1990 level care, which could be administered at a fraction of the price of delivering all of the latest advancements.
The "healthcare costs are rising" meme is false. It's like saying "the price of supercomputers is rising". In non-inflation-adjusted dollars, the top-end supercomputer from IBM costs more than the top-end supercomputer from IBM cost 10 years ago, but the price per unit of computation has gone way down.
Healthcare prices have done the same thing, but everyone wants the best possible at all times.
(I want this too, but at least I try to appreciate that what I'm getting today is significantly better than 10 years ago)
Unlike other industries, getting service is often a literal life or death issue, you have to pay or you might die; morally this makes health care very different from other industries.
An entire sub-industry has popped up around coding claims correctly because doctors have figured out what they can and can't get paid for, the effect being the insurance companies now basically dictate treatments rather than the doctor. Frankly it's extremely fucked up and it's caused entirely by companies seeing the most profit.
So, given that health care is one of the most fundamental individual needs, profit most definitely should be the goal.
But health care is not the most fundamental need -- that would be food. I find it puzzling that people don't apply the same arguement to this need. Why not say that profit shouldn't be the goal of the food industry? And that supermarkets are immoral for making a profit at the expense of hungry people? Well, because it's clearly nonsense, of course.
But I wonder if it would seem like nonsense if we lived in a world where there was no free market in food supply. We might worry that greedy corporations would only be interested in serving expensive foods to rich people.
Of course people don't apply the same argument to food, food isn't scarce for most of us and few have problems acquiring it and the ability to produce it can't be easily collected in the hands of a few, anyone can grow their own food.
Anyone cannot operate on themselves and perform some life saving operation, and while those who can certainly deserve to be compensated greatly for that ability they walk a fine moral line knowing their product, or the refusal to provide it, will directly kill people. Doctors are much more like firemen and policeman that businessman. Society has certain expectations of them serving the greater good of the community and helping people when they're in need.
The free market is not the cure for every ill and seeking profit is not, and should not be the goal of every job. Greed is not some inherently good moral trait.
When this situation gets distorted through monopoly or other forms of regulations it is generally speaking bad for everyone.
Greed is good. My greed is good for you and your greed is good for me. This is the most fundamental philosophy of entrepreneurship albeit said using a word most people through years of indoctrination think is bad.
This is also why I don't like the term social entrepreneurship. Any entrepreneurship that isn't kept a live through some sort of corruption or force is good for society as a whole.
Name me one real monopoly that isn't enforced through "social engineering". A free market may have ocasional dominant market leaders like IBM and MS in their time and Google today. None of them are or were monopolies as better technologies and startups will always (lets repeat that word ALWAYS) come around as long as they are allowed.
True monopolies like the telecoms monopolies in many countries are not outcomes of free markets, but rather more or less corrupt deals between governments and a little group of businesses. Most often the monopoly is argued as a way to protect the consumer.
The free market works wonderfully in many different places in the world and in many different aspects of our daily life. Banking, telecoms and health care are not examples of this as they are heavily regulated. Most of us readers of hacker news are doing what we are doing because of the wonders of the free market.
If not we would be marching fists held up high to Washington demanding the creation of the National Department of Internet Services, to give us lifelong employment. Yet we aren't doing that. The free market works great even though our chosen field has been hit by many different bubbles and failures. The market has picked right up with no real government interference (except for financial and gaming fields) and will continue to improve.
Spare me the old marxist marching chants (I should know what they sound like as I used to be one).
Your view that the free market works wonderfully if left alone is simply naive. The real world is simply more complex than that.
In fact, your belief that there even is such a thing as a free market is naive and ignores the very real fact that corruption is inevitable and businesses seek out regulation to protect themselves from competitors destroying the very free market they so claim to love. Any truly free market is simply a temporary state of existence destined to die as soon as corruption takes hold, which it always does.
As a programmer you should know that extremely complex systems like the world can not ever be managed by a small group of super clever beings.
This has been the fallacy of each and every of "I'm smart you're not, I'll run things" philosophies originally invented by Plato and perfected by Marx.
The world is a complex system managed by 6 billion autonomous beings. Together these 6 billion autonomous beings for an extremely smart mega intelligence. While you, I and our "leaders" may be smarter than the vast majority of these individuals. Together though is another story.
I agree with your point about corruption as long as we assume the presence of a regulating entity. Corruption is essentially the markets way of calculating a price on overcoming social engineering.
But without regulators in the first place it would not exist and would simply be just other transaction between two or more parties.
Your statement:
"food isn't scarce for most of us and few have problems acquiring it and the ability to produce it can't be easily collected in the hands of a few, anyone can grow their own food"
is directly contradicted by the millions who starved to death when food production was collectivised under various profit-hating communist regimes.
That may serve as a counter example, but it doesn't contradict what I said. America is not Russia and just because it went down that way for them does not mean that's how it'll play out for us. Knowing some history is one thing, trying to predict the future from it is another.
You seem to be hung up on extremes, that's not the real world. If I say the free market isn't the solution to every problem it doesn't imply I think it's the solution to no problem and suddenly I'm a communist.
A problem with society having "certain expectations" of doctors - or anyone else - is that extra expectations (above "do a job so that trading with you helps the world") are a disincentive from getting into that profession.
All that said, I suspect that a purely free-market healthcare system would be worse for the very poor than a socialist one like England (unless the culture had a particularly enthusiastic charitable ethic. Maybe that would develop? Does government charity crowd out private charity?).
I guess the 99 cent hamburger must also be part of my delusion, then.
Profit is the creation of value. If there's no profit, then there's no value added.
Profit works great for food, shelter, clothes, heat, and most every basic human need.
I think what really messes up the healthcare market is that the more that technology progresses, the more sophisticated and expensive treatments we discover. The cost and effectiveness of treatments are both soaring, yet people whose means are not rising as fast feel entitled to the best health care no matter what. I think as technology advances, things will only get more distorted until we realize that everyone should only get what they pay for (or what their insurance that is correctly priced by the market will cover and pay for.)
I hope you mean profit in the non monetary sense then. ie profit meaning to increase someones standard of living?
Charitable workers don't make any money and I'd say they add alot of value to other peoples lives.
For the exceptions, use exception handling also known as charities such as non profit hospitals and health centers who already donate health care to the poor.
The increased efficiency and lower cost of a non regulated approach would benefit all and make it easier and cheaper to provide good care to everyone.
Baloney. This is a belief, not a fact.
You know, there actually have been some highly intelligent and thoughtful libertarian thinkers, far from whatever fantasy you may have.
Such as financial products? I think we have enough evidence right now that people are not mature enough for a totally free market.
Because of the harm done, it's still worth noting that rent control and other "pro-tenant" law is rarely good for tenants, or indeed anyone other than sometimes well-meaning but economically illiterate busybodies.
The same can be said of workplace safety regulations, minimum wage laws, child labor, drug safety, environmental laws, and on and on.