[ExI] Economic laws/was Re: retrainability of plebeians

[BillK]

On 5/1/09, dan_ust wrote:
<snip>
>  Not at all.  The free market is an ideal.  However, economic laws, like the Law
> of Supply and Demand, apply to non-ideal conditions.  This is why that law is
> applied fruitfully to regulated markets.  For instance, the reason why many
> economists argue against rent control and minimum wage laws (and other price
> controls) is because the Law of Supply and Demand shows how, all else being
> equal, these interventions will not have the intended outcomes -- unless the
> intention is to, respectively, cause housing shortages and increase unemployment.
> (The Law, of course, does not mathematically predict the amount of real world
> shortages or gluts.)
>


I have responded in more detail to a later post than the one you quoted.

But, to summarize, I feel it is a very odd sort of law that has
unpredictable outcomes. Because 'all else is *never* equal' every
situation has to be examined on its merits.

As just one example, if GM cut the price of their cars by 10%,
consumers probably wouldn't rush to buy. Why not? Where has the 'law'
gone that says cut prices = sell more? It is because of expectations
that next month prices will be even cheaper.
Or, maybe, GM might go bust, so they wouldn't buy a GM car at any price.
Or, maybe, they just don't like GM cars.

This applies to every price change. You have to examine the special
circumstances every time. Put prices up, sales increase. Why? Because
the goods now have an added 'expensive' image. There are other
explanations as well.
It might as well be random.

I much prefer a 'law' that says if you do x, then y will *always* happen.
That's my kind of law.

BillK