While it leaves you with a bad taste in ones mouth, it is actually good sense. If there is a shortage there must be rationing, and rationing by price is by far the most efficient way of rationing in a situation like this. Peak oil is not an energy crisis. It is a liquid fuel crisis.
Im stuck in Italy, and will be for the foreseeable future.
Thanks for explaining to me the beauty of the market.
Just as rationing by forcing people to share cars if they go in the same direction or close enough could be arguably more useful. Wind power
Which is just what happened to you... high prices lead to car sharing, people respond to incentives, the market will provide etc. ;) Peak oil is not an energy crisis. It is a liquid fuel crisis.
:-)
signed: The Invisible Hand
and rationing by price is by far the most efficient way of rationing in a situation like this.
Eficient in what way? does it get the most people who need to travel moved? I think not. Any idiot can face a crisis - it's day to day living that wears you out.
Who, then, decides, and on what basis? Align culture with our nature.
During the second world war, rationing (in the U.S. at least) was done on a pretty level basis, with allowances for specific occupations... The question is whether in this sort of a system, it should be legal to sell ration tickets--which converts it back to a wealth-based system...
The question is whether in this sort of a system, it should be legal to sell ration tickets--which converts it back to a wealth-based system...
Well, yes and no. It turns it into a wealth-based rationing system with built-in redistribution. Which is a different kind of beast, because it ensures that only the surplus above stark necessity is traded in the wealth-based rationing system.
Conventional utility theory claims that this is equivalent to a pure price-rationing system, because conventional utility theory tacitly assumes that aggregate utility is independent of the income distribution. In the real world, of course, the mechanics are very different: A rationing system with saleable coupons provides a fixed price for the bulk and a floating price regime at the margin.
Now, as any properly schooled Serious economist will tell you, the market-based microeconomics works only at the margin - the bulk price is irrelevant. And as any small-"s" serious student of the real industrial economy will tell you, the cost of price volatility in the bulk is considerable. So a rationing system with tradeable coupons will (in theory) combine the best of both worlds - microeconomic incentives work where they matter (if they matter at all) and macroeconomic planning isn't disturbed by the wild price swings that accompany rationing-by-price.
Incidentally, releasing prices and production volumes at the margin but retaining price and volume controls for the bulk was how China transitioned from a command economy to whatever it is it has at present. Russia provides the other example - there, bulk prices were allowed to float at the same time as the margin prices. I think the different trajectories of those countries amply demonstrate the difference between the two systems of rationing...
- Jake If you only spend 20 minutes of the rest of your life on economics, go spend them here.
