a thread in which ilx interprets economics and finance, sometimes linen by linen*, and disagrees a lot (probably)

In an economy dominated by mega-corporations it often happens that people are forced to choose among a limited number of providers, all of whom have notoriously bad customer service.

Well, competition law has an important role in economies - especially in regard to the disruptive role of tech-based companies who may have monopolising potential.

But to expand on my budget airline example, a lot of people in the UK have embraced using Ryan Air and EasyJet etc because of the cheapness of the service. The downside is that if there’s any problem there’s no, or very limited help, and you’re virtually left to your own devices.

I think there's a couple of things being jammed together in "automated phone system" - it's true that when I am ringing, for example, my bank, I'm looking to talk to a person. There are an increasing number of useful things that I can do in the phone banking system, but they're all available on the bank's website - if I'm ringing up then almost by definition I want something "off-menu". But that's a feature of me being as comfortable with the internet as with phones - if I preferred phones then I'd be happy with the automated system.

On the other hand if all it's doing is replacing Ernestine, to get me to my eventual destination, then yes absolutely automate away.

I had not thought that "what's with the self-service checkouts?" was anything but a decade-old stand-up cliche at this point - every supermarket I go to is filled with people using them without error or fanfare.

I should probably throw a qualifier in there - it's not without flaw, but I'd estimate the percentage of times that there's a problem that requires manual assistance to be in the low single figures.

My main gripe is that it still needs a human age verification check when I am buying alcohol-free/low alcohol drinks. You’d think they could update the software for that.

Andrew F: clearly we are talking from our different experiences. What I say about checkouts has nothing to do with stand-up clichés and all to do with the fact that if you shop at Lidl SE13 then it will go wrong, in some way or other ... perhaps 50% of the time, as against your low single figures.

It occurs to me that the banal truth may be that people's views on these things may relate to such material, factual differences in life. Maybe people who shop at Bath Spa Waitrose do find that checkouts are, in one way or another, all fine, whereas in SE13 Lidl they're not.

A note: I am not stating that you, as an individual, live in Bath. That example was hypothetical.

some people just have an easier time using/adapting to self check-out machines than other people ... I don't think it is realistic to universalize this in either a pro or anti- way

True - though se13 Lidl might want to consider calling in an engineer.

Someone should ask another finance or economics question to move things on.

Question: it seems like fraud is very easy to do and a good way to get rich, what am I missing apart from the part where you screw up and get arrested

i have https://www.simonandschuster.com/books/Lying-for-Money/Dan-Davies/9781982114947 on my list, which iiuc gets into that question silby.

i just started https://global.oup.com/academic/product/the-world-for-sale-9780197651537?lang=en&cc=us, which may be of interest to readers of this thread.

i picked up a copy of black edge at a thrift store for a few bucks, maybe this will be the spur i need to take it off the shelf and read it

Yeah I read Lying for Money that was a good time, I guess the message of that was that you basically can’t stop once you start bc there’s no place to go and you probably have a psychological need to keep lying

don't click this link until tomorrow unless you cross picket lines but this feature is absolutely nuts https://www.nytimes.com/2022/11/29/health/lying-mental-illness.html.

Question: it seems like fraud is very easy to do and a good way to get rich, what am I missing apart from the part where you screw up and get arrested

― G. D’Arcy Cheesewright (silby), Thursday, December 8, 2022 12:17 PM (forty-five minutes ago)

not much tbh ... it really just depends how much you fear the Repressive State Apparatus (or have a conscience/ethics about stuff related to the mechanism by which you commit the fraud)

like going back to the self checkout machines ... every time I use one to buy groceries, I do think of how I would go about significantly reducing the amount I have to pay by ... taking certain actions.

personally I would like to sell water with food coloring in it to audiophiles at grossly inflated prices

I guess it's like most crime deterrence. You have a low chance of getting caught for any particular infraction, but the consequences are generally bad enough if you do get caught, that for most people, it's not worth it.

yeah that grocery store is way too conveniently located to risk being banned from

Question: it seems like fraud is very easy to do and a good way to get rich, what am I missing apart from the part where you screw up and get arrested

― G. D’Arcy Cheesewright (silby), Thursday, December 8, 2022 3:17 PM (five hours ago) bookmarkflaglink

just a hunch but i wager there would be a lot more fraud if people only did the rational expected value calculation. fraud pays. morals and norms (rather than deterrence) actually do a lot of work keeping it at bay. same with crime. it's an oft-made point (usually as a critique of the "homo-economicus" assumption invoked by most economic theories that everyone is a purely selfish sociopath) but markets in general would fail without some minimum baseline level of trust and integrity

i just started https://global.oup.com/academic/product/the-world-for-sale-9780197651537?lang=en&cc=us, which may be of interest to readers of this thread.

― 𝔠𝔞𝔢𝔨 (caek), Thursday, December 8, 2022 3:38 PM (five hours ago) bookmarkflaglink

this looks great. commodities are so fascinating to me. best odd lots episodes by far are the ones where they have some commodities nerd on explaining in insane detail like what's been going on with the market for corn the last few years and it's like a dramatic epic with all this geopolitical depth (worst odd lots episodes are the crypto ones obv)

anyone read or reading brad delong's new book slouching towards utopia? i'm like 50 pages in and... kinda hating it tbh

xp - i have a college friend whose economic expertise is around fisheries and global markets for fish ...

he eats well imo

anyone read or reading brad delong's new book slouching towards utopia? i'm like 50 pages in and... kinda hating it tbh

why?

I remembered an economics question in the supermarket today.

The price of everything (eg: food) is going up and getting high.

Will it ever go down?

My guess is: no, because people who sell it won't want to do that and we can't make it happen.

So we'll be stuck with these high (and higher) prices forever, though the amount of money we get doesn't go up.

Some prices will go down based on weakening demand or oversupply, but when the price of everything goes down it's call deflation and generally speaking that is worse than inflation for just about everybody.

So you don't want the prices of the thousands of things that have gone up, to go down.

But if they don't go down, we will all just remain comparatively poorer, because prices have gone up but our money has not.

During a deflation money evaporates out of the economy. This is what happened during the financial crisis of 2008-2009. Trillions of dollars went *poof* in a few weeks. Cash flows disappear. Companies go bankrupt. Jobs disappear. Incomes disappear. Tax revenues shrink. Oh, and prices go down.

I remember some exception to supply & demand from school. During rough times, you can kinda price gouge on cheap food like potatoes & bread, but people will still buy them since they're so much cheaper than anything else. I guess ramen would fall into this now, or the fast food 'dollar' menu

Hang on … Lots of products types have come down in price over time, especially mass- manufactured products. Also, travel and holidays.

TVs are a good example. In the 1980s a 19 inch color TV would set you back about $400-500 (not adjusted for inflation) and it was massive and weighed a ton. Today you can get a much higher resolution, flat-screen 24-inch TV for under $100.

re: last few posts, doesnt this depend on the cause of inflation? Or even what inflation is

If the price of one good (or a range of goods reliant on that one good) goes up...is that inflation or relative value? Oil goes up and we call it inflation but oil goes down and we dont call it deflation

here's what i wrote in a post upthread about why deflation is undesirable

one reason why is that deflation is very undesirable as it leads to a "deflationary spiral": if consumers anticipate that prices will be lower tomorrow, they will delay purchasing, this then lowers demand, causing prices today to fall further, with causes firms to layoff workers and incomes to fall, which makes demand falls further, and so on. a positive inflation rate provides a "buffer" against deflation. this is especially important over the business cycle since prices tend to fall at the onset of a recession. during the early period of the great depression prices fell by something like 7% every year. central banks nowadays try really hard to avoid this

I get why deflation is bad and worse than inflation, but isn't there a distinction between prices rises/falls in one product or area and generalized inflation? Price rises/falls aren't necessarily inflation/deflation if its a change in relative value to other products?

yep

Absolutely true that that some things (like electrical goods) do come down in price over time due to technological change etc.

But meanwhile, most foods have gone up in price, quite a lot, in the last year.

Once again, if those prices don't come down (which I don't expect them to), then we will all remain relatively poorer (at least in relation to sustenance), because our money has not increased.

Theories of deflation and inflation don't seem to change that fact.

petrol has come down from its super high prices of a year or two ago.

Well the idea is that we don't want deflation and prices dropping due to deflation is bad. But prices of individual goods like oil or foods coming back down isn't bad - especially if those goods prices increased relative to other things (like incomes), that relationship changed.

A paprika costs x minutes of labour, if that goes up to 2x minutes of labour, its not bad if it then returns to x minutes of labour. Thats a relative change of value. But if the paprika AND the wages go up, then its still x minutes of labour

There’s a lot of variables behind price rises for food in the UK: with supply chains impacted by covid pandemic, Russia invasion of Ukraine, Brexit resulting in increase cost and complexity of trade, and weaker sterling being some of the big factors. And there’s extreme weather/impact of climate change.

It’s difficult to say what will happen in the future and when with much certainty.

My guess is: no, because people who sell it won't want to do that and we can't make it happen.

So we'll be stuck with these high (and higher) prices forever, though the amount of money we get doesn't go up.

― the pinefox, Friday, December 9, 2022 5:53 PM (yesterday)

food seems to me to be a category of goods on which we can rely on that classical economics stalwart to control, competition. what you're suggesting is that everybody will end up colluding to keep prices high, which is a real fear. that's why most countries have antitrust/competition enforcement agencies whose job it is to keep an eye out for anticompetitive behavior. what constitutes anticompetitive behavior is actually a pretty interesting question nowadays given the rise of big tech and has led to the rise of a school of thinking called "hipster antitrust" which is a name i think ilx will appreciate.

in case it gets lost in the big block of text:

https://www.competitionpolicyinternational.com/wp-content/uploads/2019/06/APRIL-2018-1-238x300.jpg

what you're suggesting is that everybody will end up colluding to keep prices high

...including the notorious WH Smith ballpoint pen cartel, outed upthread.

There is ample proof of food megacorps price-gouging, that shouldn’t really be a subject for debate.

Afaic, many consumer goods are not actually necessary, and so their comparative low prices now as opposed to 20, 10, or even 5 years ago doesn’t mean much, and I know I’m not alone in that. Fuel (for both transport and heat, etc) and food are the things that actually matter to consumers.

Like I know I’m in the minority here, but Id certainly rather spend $1200 less at the grocery store every year than have a fucking cheaper teevee.

Maybe not so much of a minority as you might think. whether you're indexing your opinion against ilx, or the USA, or the world there are plenty of people out there living hand to mouth or nearly so.

"hipster antitrust" which is a name i think ilx will appreciate.

haha I did appreciate it! I am about to read the linked article -- and just wanted to mention that the ad atop the page is for outsourcing administration of defined benefit plans ... because pensions are outdated

not to be confused with hipster anti-thrust - soaking isn't just for Mormons

Airline mergers and agricultural monopolies and oligopolies have raised consumer prices above competitive levels but lowered prices that suppliers can charge below market levels, she argues, transferring hundreds of billions of dollars each year to the economic elite.

I probably mentioned the issue re suppliers in one of the numerous threads where I "kinda lol but mostly sad"-ed how people in ag-towns loved to shop at wal-mart even while wal-mart was instrumental in decimating small to mid-size agricultural businesses by paying less for products than it took to produce them, which would often result in either: increased poverty (e.g. walmart's cheap prices are the most we can afford because we can barely survive because walmart pays us too little for our products) or consolidation of agricultural land/businesses to corporate interests outside the region.

What is meant by 'price-gouging'?

It is true that some things, like food to survive, are more important than others. But it would be misleading to say that many other things 'don't matter'. Music, fiction, poetry, are things that matter to many of us. If the prices of those became impossibly expensive, it would be bad. (I'm not saying that has actually happened or will happen.)

And again, as noted, self-checkouts rarely work without human assistants.