The first thing these meme level economic takes about supply and demand leave out is the elasticity of both supply and demand that affects how sensitive demand is to price changes and prices are comparable to availability.
That argument made sense before everything was owned by a few megacorps who collude with eachother.
So like, back in 1875.
Right? People who try to apply things from econ textbooks to the current world are on the wrong track. It doesn’t matter anymore. Line must go up
We outsourced all the manufacturing jobs and gutted the service sector
Yep, I was gonna say this.
Ford was a racist piece of shit.
But he was at least competent enough at capitalism to understand that… consumer products… need consumers… who are paid enough … to be able to buy said products.
Ford saw it as a means of control. He dictates who gets to live in the suburbs, who gets the cushier factory jobs, and who earns the more lavish managerial salaries.
I don’t think his model was strictly intentionally good. It just so happened that baking your consumer base into your workforce guarantees a certain baseline in sales and promises growth that scales with the size of your business.
Oh yes, I completely agree with you, it was for him a system of control.
… He was just actually fairly competent at managing that system, unlike our current gaggle of racist rapist reprobates.
Came here for this one word, collusion. Exhibit A Phoebus Cartel
Please change, capitalism (hah, as if).
Or advertising and the science if influence existed.
Econ 101 types are so insufferable and are often the C+ student in Econ 101.
Supply and demand only works in perfectly competitive markets where all parties have perfect information (literally taught in Econ 101).
Companies know this, and do everything in their power to ensure this doesn’t happen, because any surplus due to assymetries flow to the participant with the advantage (also taught in Econ 101).
Worst of all is that negative and positive externalities are also taught in Econ 101 but they are almost never mentioned by these types.
TL;DR For positive/negative externalities: Company produces pollution, pollution negatively affects the economic value of things outside of the company’s business (e.g. kills fish in rivers), company most efficient process should be produce less at higher price.
This means the supply/demand curve can be shifted with taxes (called Pigovian taxes) to correct the supply/demand curve so it accurately reflects the value of broader society. Conversely a healthy population is more productive so subsidising healthcare makes sense since creates more benefits than the benefit of the consumer and entity providing it.
Taxes and subsidies can be an effective tool to adjust the supply/demand curve to maximise the benefit of society as a whole in many cases when used aggressively enough.
You can effectively solve climate change pretty easily by taxing emissions from fossil fuels and providing the entire amount as energy subsidies. This way renewables get a massive advantage from the energy subsidies at no cost to the tax payer. You can count on the market to min/max based on the rules.
These types still go “Hurr durr, bUt ThE dEaDwEiGhT lOsS”.
My favorite is when you break the brains of “econ 101” people with some labor theory of value
‘Okay but you understand that the idea/agreement of me “owning” the factory doesn’t make the web enabled ultra-girth horror villain branded vibrating dildos, right? It’s the workers and artists and IP law negotiators who make the magic happen’
(Please imagine your faves here)
