Doesn’t seem to change the policy, though.
Category Archives: Economics
While certainly price and quality are not necessarily related, Mr. Goldstein shows a common ignorance of Economics in his argument for pricing wines based on the cost of production.
One might divide wine pricing theory into two rough schools of thought. There is the camp that believes wine should be priced from a supply-side/cost-plus perspective–you take the cost of production of the wine, you add reasonable costs and a modest profit for the producer, you factor in markups for distribution and retail, and you arrive at more or less what the wine should cost. The other camp believes that wine should be priced from a demand-side perspective–that a wine is worth whatever the market is willing to pay for it.
The reason I’m in the first camp, and not the second, is that I don’t subscribe to the neoclassical model of consumer rationality upon which the demand-side pricing theory is built, a counterfactual universe of stingily hypersensitive, quality-sniffing consumers. My sense is that, especially when it comes to hazy markets like wine, real human beings — within certain constraints — generally anchor themselves to market prices that are imposed upon them, and generally pay for things what they’re told those things are worth.
That there is a ‘first camp’ at all is an indicator to me that too many people don’t get enough (any?) exposure to fundamental Microeconomics. You don’t need to take an advanced price theory course (although that was the most fun I had in a college course, with everything taught in terms of beer and pizza) to understand how prices are set. Continue reading
John Stossel’s article today is fantastic, and required reading. An excerpt:
Of course income is down lately, but it’s up sharply over the long run. The chart actually understates the gains because it doesn’t count benefits from new technology. A Kindle may replace a hundred books, but such gains aren’t visible in the government’s data.
As economist Don Boudreaux points out: “the government’s data also underestimates the middle-class’s increasing prosperity, for it ignores the shrinking size of households. In 1967, the average household contained 3.14 persons; in 2006 it contained 2.57 persons. This fact means that the real income for each member of the average household grew.”
Read it. Think about all the advances in technology that improve the quality of your life, and how the cost of that technology has dropped in the last 10 years.
Doesn’t this look better than 2000 pages of federal bureaucracy? Maybe not perfect, but at least better?
For those of you upset about the use of HFCS in foods, here’s part of the reason it’s used so much.
(HFCS isn’t a health issue, and doesn’t make people fat. Table sugar is 50% sucrose and 50% fructose. HFCS is 45% sucrose and 55% fructose. If that little bit of fructose is an issue, I suggest you take aim at apples.)
Keynes vs Hayek, set to a rap.
The curious task of Economics is to demonstrate to men how little they really know about what they imagine they can design.
F.A. Hayek. Word.
If you are a multi national company, I highly advise you to get the hell out of Venezuela now.
Cut your losses and run.
Excellent Reason.TV vid on some of my favorite things – Wine, Freedom, and Entrepreneurship.
BTW, I met Mike Grgich a couple of years ago in Napa, a wonderful and engaging man who lives for people to enjoy his wine.
As you can see with the NFL, which has higher income inequality than the US population.
They seem to do just fine. Imagine what the inequality would be if there were no cap.
Michael Moore says capitalism is evil.
So, I’m sure he’s not charging anyone to see, copy, distribute, or use this, or any of his other films. And I’m sure all the cameramen, grips, writers, and lighting folks who worked on the film did so for free, not for any evil capitalist profit.
Capitalism is why he can make the film in the first place. What an idiot.