Originally posted by FMF You're deliberately missing the point and my question, I will assume.
[b]Markets do go up and down -- they are supposed to. That's what makes them efficient.
So working people having to skip meals in a prosperous country is a function of market efficiency, as you see it, rather than a market failure?[/b]
A couple who recently came back from visiting their daughter were absolutely
astounded at the price of food in Australia, it was three times as much for a single loaf
of bread as in the UK, i have no idea why, but they are quite well to do, middle class
family and they noticed it.
Originally posted by FMF What result would a similar survey reveal in the country YOU are living in?
My first impression is that the survey is almost certainly flawed in some way. I simply don't believe the claims are accurate.
As for where I am living, there hasn't really been much of a slow down as such. Certainly not the apparent down turn that the first world seems to have experienced.
Generally however, people feel really badly off when the economy goes down, regardless of where they were to start with and where they are now. I suspect that Australians feel poorer than South Africans do, but are in fact richer.
Originally posted by FMF You're deliberately missing the point and my question, I will assume.
[b]Markets do go up and down -- they are supposed to. That's what makes them efficient.
So working people having to skip meals in a prosperous country is a function of market efficiency, as you see it, rather than a market failure?[/b]
I think high food prices that are not the result of a local (e.g. drought-induced) shortage are more likely due to a government failure than a market failure. Are you asserting there is a food cartel in operation in Australia?
Originally posted by spruce112358 I think high food prices that are not the result of a local (e.g. drought-induced) shortage are more likely due to a government failure than a market failure. Are you asserting there is a food cartel in operation in Australia?
First you claimed working people having to skip meals was probably the result of the carbon tax. Then you seemed to claim it was a function of market efficiency. And now you suggest it's government failure and throw up a red herring about a "food cartel"? Why isn't 'working people having to skip meals' not a market force that exerts upward pressure on wages or downward pressure on prices?
It would seem to me that this meal-skipping is more a symptom of a lack of budgeting skills and a need to show off to the outside world rather than a symptom of poverty.
If I had a bit more money, then I'd buy better cuts. At one time we used to eat hot dogs for meals a few times a week. We used to eat more chicken. Then we started eating more beef and even buy cuts like Rib eyes once or twice a year. Pork can be very affordable here in the US too. When I say affordable, I mean much cheaper than beef.
As prices go up, I've noticed that we don't buy as much beef and buy much more pork and chicken. I don't worry about it too much. When we are stuck eating hot dogs and Ramen Noodles a few times a week, then I'll be bothered.
Originally posted by FMF First you claimed working people having to skip meals was probably the result of the carbon tax. Then you seemed to claim it was a function of market efficiency. And now you suggest it's government failure and throw up a red herring about a "food cartel"? Why isn't 'working people having to skip meals' not a market force that exerts upward pressure on wages or downward pressure on prices?
"Why isn't 'working people having to skip meals' not a market force that exerts upward pressure on wages or downward pressure on prices?"
It is, and works on the one directly related. If people skip meals due to prices, product remain unsold, driving prices down when it becomes apparent that an oversupply exists.
How over supply of food would exert upwards pressure on wages is not clear. If the oversupply persisted for long, it could result in cutbacks in production and lost jobs, or lower wages. Wages generally respond upward to shortages in production not to surpluses. I hire workers and pay them not on their needs or wants, but on what their labor is worth in productivity. If a surplus exists, it isn't likely I'm going to be raising wages.
Originally posted by normbenign "Why isn't 'working people having to skip meals' not a market force that exerts upward pressure on wages or downward pressure on prices?"
It is, and works on the one directly related. If people skip meals due to prices, product remain unsold, driving prices down when it becomes apparent that an oversupply exists.
How over supply of food would exer ...[text shortened]... rth in productivity. If a surplus exists, it isn't likely I'm going to be raising wages.
So it is your contention that the market mechanism - if left to its own devices - will always make the adjustment needed so that working parents in a developed world economy are not skipping meals to feed their children?
Originally posted by spruce112358 I think high food prices that are not the result of a local (e.g. drought-induced) shortage are more likely due to a government failure than a market failure. Are you asserting there is a food cartel in operation in Australia?
Far more likely is that low food prices in Europe are a result of farm subsidies.
Originally posted by twhitehead Far more likely is that low food prices in Europe are a result of farm subsidies.
Agreed, but FMF was asserting a market failure in Australia for food and a cartel would be a prime reason for that, so I was wondering if he thought that was what had occurred.
If there is not a cartel, then my claim is that rising food prices either reflect low supply which the market will solve on its own (quicker and more effectively without any government action), or, some sort of government interference somewhere -- possibly inadvertent. The problem being that if it is the latter, then the market cannot solve it on its own.
Originally posted by spruce112358 Agreed, but FMF was asserting a market failure in Australia for food and a cartel would be a prime reason for that, so I was wondering if he thought that was what had occurred.
If there is not a cartel, then my claim is that rising food prices either reflect low supply which the market will solve on its own (quicker and more effectively without any g ...[text shortened]... vertent. The problem being that if it is the latter, then the market cannot solve it on its own.
Supermarket cartels are pretty common, because small corner shops don't have the advantages of scale and cannot compete. But such a cartel is not the whole story, of course.
Originally posted by KazetNagorra Supermarket cartels are pretty common, because small corner shops don't have the advantages of scale and cannot compete. But such a cartel is not the whole story, of course.
But such cartels presumably cant push the prices up beyond what would be economical for small corner shops.
Here in SA we have had several cases of supply chain cartels. eg the bread producers were found to be price fixing.
Again, it is likely their prices were still below (or at least not far above) what a small corner shop bakery could produce at.
It is also possible that transport is a bigger factor in food prices in Australia or that lower population densities results in smaller shops on average.
I think people tend to seriously under estimate the enormous economical advantages of compact city living.
Originally posted by twhitehead But such cartels presumably cant push the prices up beyond what would be economical for small corner shops.
Here in SA we have had several cases of supply chain cartels. eg the bread producers were found to be price fixing.
Again, it is likely their prices were still below (or at least not far above) what a small corner shop bakery could produce at.
Yes indeed, that is my point, the advantages of scale are so large that they can afford to raise prices by price fixing, with certain limits of course.
Australia: 1 in 3 skip meals to feed children
14 Nov '11 09:35
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