When i say supply and demand does not apply, I mean the basic rules of supply and demand do not apply. In most cases where the free market is effective at allocating resources, it’s because when demand increases, price increases, and when demand decreases, price tends to decrease.
The problem with things like Healthcare, housing, food, etc. Is that that demand line is a straight line. People cannot choose to not eat, or have shelter (at least most people don’t want to be homeless), or have Healthcare, so they are left with a single option: to go into debt.
Because people cannot choose not to purchase necessities, according to the supply and demand rules, and the basics of capitalist economics (charge as much as people are willing to pay), with no change in demand based on price and with no legitimate regulations, this kind of thing always results in exorbitant prices that most people cannot afford.
What I mean in one sentence: the free market is incapable of allocating resources effectively for necessities because people can’t just choose not to buy.
The whole idea behind “Supply and demand” require that “demand” can fluctuate as readily as “supply”.
Shelter does not fit the narrow confines of the econ101 S&D concept; as shelter from the elements is a necessity, and so demand does not fluctuate.
But you are correct about S&D existing in the market as it currently stands. Problem is, “the housing market” has moved fully away from a “market of shelter”. It is driven by speculators who hold vast swaths of property and treat these items as a commodity, not shelter. “Shelter seekers” compete with each other and with speculators in this “commodities market” but “Shelter Seekers” are not the driving force of demand, their demand is static.
So you’re right in the sense that supply and demand exists for the current “housing market”, but the S&D are held and driven by and for speculators, it is not a shelter seekers market.
What?
You could argue it shouldn’t and myself and 99% of Lemmy will agree.
But it’s sure as shit not the current situation.
Like, people needing something is literally the whole “demand” part of “supply and demand”.
Let me explain what I mean:
When i say supply and demand does not apply, I mean the basic rules of supply and demand do not apply. In most cases where the free market is effective at allocating resources, it’s because when demand increases, price increases, and when demand decreases, price tends to decrease.
The problem with things like Healthcare, housing, food, etc. Is that that demand line is a straight line. People cannot choose to not eat, or have shelter (at least most people don’t want to be homeless), or have Healthcare, so they are left with a single option: to go into debt.
Because people cannot choose not to purchase necessities, according to the supply and demand rules, and the basics of capitalist economics (charge as much as people are willing to pay), with no change in demand based on price and with no legitimate regulations, this kind of thing always results in exorbitant prices that most people cannot afford.
What I mean in one sentence: the free market is incapable of allocating resources effectively for necessities because people can’t just choose not to buy.
Removed by mod
I don’t understand what you’re angry about.
The whole idea behind “Supply and demand” require that “demand” can fluctuate as readily as “supply”.
Shelter does not fit the narrow confines of the econ101 S&D concept; as shelter from the elements is a necessity, and so demand does not fluctuate.
But you are correct about S&D existing in the market as it currently stands. Problem is, “the housing market” has moved fully away from a “market of shelter”. It is driven by speculators who hold vast swaths of property and treat these items as a commodity, not shelter. “Shelter seekers” compete with each other and with speculators in this “commodities market” but “Shelter Seekers” are not the driving force of demand, their demand is static.
So you’re right in the sense that supply and demand exists for the current “housing market”, but the S&D are held and driven by and for speculators, it is not a shelter seekers market.
Removed by mod
I guess your name means nothing. Having concepts explained shouldn’t make you this hostile hahaha! What a fuggen debatelord omg 😂