TheMoonBnuuy
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Price gouging only exists as a term because supply and demand doesn't set the price of goods and services.
Capitalism as an idealized system is great. However, like all idealized systems, it never survives contact with reality. The moment corrupt people realized the rules aren't natural, and nobody can stop them from breaking the rules that are supposed to keep them in check, it got corrupted, and they started screwing everyone over.
Don't mistake me for defending capitalism. I'm all for judging systems by how they're realized, not how they're idealized. A system isn't its intended effects, a system is its observed effects.
The rules of capitalism: competition, price discovery, market entry... they aren't laws of physics. They're social agreements that can be broken by people with enough power to do so without consequence. What's more, this isn't new, this problem was revealed very early on, all the way back in the days of Robber Barons. And we still haven't learned.
slopwizard
Capitalism, as an economic theory for price efficiency, assumes that multiple non-colluding competitors exist for all goods. This is simply not true in reality, especially because the government has not been doing its job breaking monopolies
CUNTDESTROY3R
meme2zombie
Casually
As life goes on I am learning more about conservatives and their mindset. One aspect of them is they like to be the strong ones and will always see themselves as such. The reason they like the open market is they are under the belief that the consumers are the ones with all the power in capitalism.
Bobbobbobobbananafanafobob
Two people meeting and discussing prices - collusion
Someone setting up a psuedo AI website called whatshouldisetmypriceat.com and getting everyone to use it - niche capitalism!
Chicagorooftop
I think capitalism is very efficient at making winners and losers but at large scale you get huge winners (trillionaires). The huge losers are everyone else and the internet scales up to the max.
Teddy Roosevelt was a Republican who realized that big business was threatening government’s power to control it.
Trump invited tech moguls to sit at the table at G7!
So it happened. They are going to control the nations.
somerandomusernamething
Capitalism works when there are infinite resources and no barriers to entry. Since all resources are finite and barriers to entry are created whenever possible, capitalism just turns into oligarchy.
Clockworkdancerobot
"What the Market will bear" is a tricky thing. with all the consolidation and ownership by large private equity funds, there's zero reason to compete. Even with competition, the perverse incentives to keep prices high can be a problem. We need rules for goods and services that are vital to our lives. Because those who own those aren't going to make it cheap on their own. Hell, many are burning the market and moving on.
TheMoonBnuuy
ThatOtherGirlYouKnow
Hell yeah, well said!
michaelfire
This was proven as the large food suppliers kept aggressively raising the prices on groceries before the 2024 elections...and kept on raising them...because they could...aka price fixing, collusion. The US is anti-competitive in many sectors: pharma, media, healthcare, insurance, gas, cars, meat, https://www.npr.org/2026/06/30/nx-s1-5876239/eg">omplaint">https://www.npr.org/2026/06/30/nx-s1-5876239/egg-producers-settle-with-doj-states-over-price-fixing-complaint https://goodjobsfirst.org/conspiring-against-competition/
00110001001110010011100000110100
You forgot the first law, make more profit every year. Could even get sued if not following every avenue that keeps stock price and dividend up. Including massive layoffs. Capitalism as we have it is good for not more than 5% of the worlds population and it will get worse.
TheMoonBnuuy
True. But I didn't forget it. That's out of scope here. Not saying you shouldn't discuss it though. Just the post's scope is the myth of supply and demand pricing.
00110001001110010011100000110100
Both part of a larger scope but I understand.
TheMoonBnuuy
I mean feel free to discuss it, I'm not trying to shut it down. Just saying why I didn't include that part.
azgrak1
Jeremy Clarkson of Clarksons Farm fame had an issue with tons of barley he had harvested. The regular buyers were offering less than it cost him to grow it. He turned around and started a brewery with his barley instead. Now one of the fastest growing companies in Britain. He has turned down huge offers to sell.
ToSisPoS
Reminds me of Canadian Tire who in the first few weeks of lockdown decided to jack up the prices for their facemasks from $18 to $50 for a box of 25.
maas2908
What if I told you capitalism only works under ideal circumstances?
TheMoonBnuuy
What if I told you ideal circumstances don't exist. Only real circumstances exist.
iamcoolstephen1234
Egg producers not hit by bird flu could raise their price because buyers still buy their eggs. The demand is enough to accommodate the price increase. Despite your other comments saying that economics is wrong: People who buy premium eggs switch to lower-tier eggs when the price gets too high. If those alternatives are not available, they will pay more for their eggs. Or they don't buy.
Producers don't "arbitrarily" raise prices. Its market demand.
TheMoonBnuuy
*sigh* Did you even BOTHER checking to see if anybody else made t he same argument and what the response is?
People who were buying $2/dz eggs aren't going to be suddenly buying $9/dz eggs just because their $2/dz eggs get increased in price to $3/dz. That's not how supply and demand works.
They're TECHNICALLY all eggs, but they're sold to fundamentally different markets in practice.
Samja192
So much of what I learned while studying economics at uni has been curb stomped by real life observations of how things actually work. The "invisible hand" exists, but it's not what our economics professors taught us it was
TheMoonBnuuy
that's because professors teach the idealized system, but you have to live with the realized system.
fiveclovers
...I work with an egg company and the d-pops they are doing now are insane...for multiple reasons.
Jersquall
Frencheeseater
Something1Said
Egg producers raising prices when they're not hit by bird flu is explained by supply and demand, because bird flu is hitting other producers and making their supply (and thereby the overall supply) go down. So the price goes up.
This isn't a glitch with capitalism, it's capitalism working as intended. It's a game invented by people with money to make us all use the pointless resource they hold, with the rules built so that it all flows back to them. NFTs, basically. Capitalism has to die.
TheMoonBnuuy
No. It's not. Eggs aren't a singular commodity that exists in a singular market.
An egg seller typically supplies all the eggs for a single price tier. People stay within their price tier unless forced otherwise. Someone who sells high end eggs and isn't hit by bird flu, their supply and demand numbers are not affected by a low tier egg seller being hit by bird flu. There's zero overlap in their customers.
Something1Said
I've responded to this elsewhere; what do you mean zero overlap? They're both eggs. People will buy different eggs when they can't buy their normal eggs. The demand for "high tier" eggs is impacted by the supply of "low tier" eggs. If you prefer you can imagine "low tier eggs" as a single product that can be substituted with "high tier eggs" if the price for "low tier eggs" exceeds that of "high tier eggs", which it would if the supply of "low tier eggs" vanished.
TheMoonBnuuy
People who buy eggs for $2 a dozen aren't going to suddenly start buying $9 a dozen eggs when their $2 a dozen eggs are $3
Come on man, this isn't rocket science.
Something1Said
They will if they can afford $9 a dozen, which many people can. Many people, especially in the US, are not so poor that they couldn't absorb a temporary 500% increase in the price of eggs. I mean, we absorb huge changes in prices for all kinds of things, all of the time. Like gas.
TheMoonBnuuy
No. If they're buying $2 a dozen eggs as a matter of habit, they're going to buy the same eggs at $3 a dozen instead switching to premium eggs at $9 a dozen. Frugalness doesn't go away to the point of spending $7 more per dozen instead of just $1 more per dozen.
What income bracket are you, or planet are you from? Because either you're either wealthy enough to be completely disconnected from the reality of normal humans, or you're a space alien.
TheJomsborgViking
I had socialist teachers in special education. They were very mouthy about the education syllabus and what they felt was wrong and why.
My first year high-school teacher straight got fired at the end of the year because he went so far off the syllabus, most of our actual earned credits were from economics, and that wasn't supposed to happen until years 3 and 4.
TheMoonBnuuy
Aside from teaching a more advanced syllabus instead of tweaking the syllabus they were supposed to be working with, sounds like a great teacher.
TheJomsborgViking
He was pretty outrageous, I mean all them were cool, but he was a bit more eccentric. It was special education, kids with behavioral issues, learning disabilities, short attention spans.. we had teacher assistants as well. One used to burn music CDs for me straight from Kazaa when that was a thing, for every good day I had... I didnt have hood days often because of a lot of self loathing issues and shit at home.. anyways, I learned about all sorts of music because of him, also am better now.
CelestialSea
That's because when you allow monopolies, virtual monopolies, or a small number of companies to control the vast majority of a given product you no longer have a free market.
TheMoonBnuuy
"But natural monopolies are short lived" - Libertarians who think the idealized system of a free market that they propose would ever survive contact with reality.
CelestialSea
Ain't nothing natural about monopolies under Capitalism. They're inevitable and, because the money IS the government, they soon become hard-wired into law.
TheMoonBnuuy
Ah I see.
You have an even more idealized version of the free market than the vast majority of actual educated Libertarians. Ever heard the name Milton Friedman? Joseph Schumpeter? Murray Rothbard? Have you even studied economics, because right now it sounds like you're just regurgitating talking points you misheard without understanding the actual context.
joh775
a popular saying about economic systems: "Capitalism is the worst economic system, except for all the others." This sentiment reflects the widely held view that while free markets have significant flaws, they consistently outperform alternative systems in practice,
joh775
Citation: https://pittnews.com/article/5424/opinions/capitalism-the-worst-economic-system-except-for-all-the-others/
TheMoonBnuuy
The "outperform" claim HEAVILY depends on the outcome you're using as the metric.
Outperform according to what measure? GDP? Fine, capitalism does well there. Median quality of life? More complicated. Wealth inequality? Capitalism has a documented track record. Life expectancy? Depends which capitalist country and which comparison. Happiness indices? Interesting results there. Environmental sustainability? Capitalism has some explaining to do.
joh775
I can't argue with what you say. As the statement says, "free markets have significant flaws."
Casually
https://www.youtube.com/shorts/NpzzzXrKkWY
This guy has some good videos
meme2zombie
He's great, and his delivery is fun.
smartm07
Well no, that’s still supply and demand… demand is high enough that they can charge high prices, and there isn’t enough supply for other sellers to feel benefit to undercut them… still shitty, but it IS supply and demand…
TheMoonBnuuy
WRONG!
You might see eggs as interchangeable, but the different pricing tiers for different tiers of eggs are not interchangeable. Someone who only buys the $2/dozen eggs isn't going to be increasing the demand on $9/dozen eggs when the supply of $2/dozen eggs causes the price to increase to $3/dozen. To increase the demand would require them actually buying the $9/dozen eggs instead of the now $3/dozen eggs. Yet the $9/dozen eggs increase arbitrarily when the seller goes "haha price go up"
Unagi604
Can someone explain the example to me like I'm 5? Doesn't bird flu hitting some farms and not others reduce the overall supply, while the demand remains the same?
Cayowin
Economics is about perception and what the market can bare.
The perception is that egg supply is down, this "permits" suppliers to raise prices without upsetting the buyers at them as the perception is the value of the egg has risen. This may not be the exact case of reduced supply in a specific town market, but the overall perception of increased value allows prices to rise to meet expectation.
Raising prices without excuse, makes the market perceive that your specific good is overpriced
TheMoonBnuuy
Egg farmers tend to supply all of the eggs of a particular market niche to the customers they provide them to. So if a bottom tier egg farmer gets hit by bird flu, and raises their prices due to their supply diminishing, but the mid and upper tier eggs aren't affected by bird flu, then the people who were going to buy those haven't increased, and the supply hasn't decreased. But they still raise their prices to exploit the bird flu epidemic and price gouge.
TheMoonBnuuy
Essentially nothing changed for those farmers, demand did not increase, supply did not decrease, but they're still changing the price.
Supply and Demand only have a marginal influence on prices these days, in the end S&D doesn't dictate the price, the seller does.
Saw a Chanel branded surf board selling for $28,000 used. The supply might be low, but there isn't exactly a glut on the market for surfers wanting one. If I made a surfboard by hand, it wouldn't actually be worth that much despite
TheMoonBnuuy
the fact that handmade surf boards are in higher demand than Chanel surf boards, and the supply for mine is even lower.
Cayowin
The surfboard is a veblen good.
TheMoonBnuuy
Oooooooooh. So supply and demand isn't the only thing that dictates price.
IIIIIIIIIINTERESTING!
Something1Said
Aren't people pushed from the bottom tier eggs to the mid and upper tier eggs by the bottom tier supply drying up? Therefore, driving up the demand?
TheMoonBnuuy
HAHAHAHA
No.
Someone who can't afford top tier eggs isn't going to suddenly switch to top tier eggs when bottom tier eggs raise their prices to less than top tier eggs. In reality they stop buying eggs or buy fewer of them, which actually lowers demand.
What the hell are you smoking? Cuz whatever it is, I want to avoid it.
Something1Said
If the theoretical price for "low tier eggs" exceeds the current price of "high tier eggs", what happens?
TheMoonBnuuy
I'll take things that haven't even come close to happening for $800, Alex.
gayvillian
I was just reading today about how businesses are complaining about rising (lol) wages. If I opened a lobster restaurant in the middle of the desert and complained about how expensive it is to get lobsters to the desert, everyone would call me an idiot. When someone starts a business and is floored that they can't pay workers slave wages, people listen to them and sympathize. If you can't afford to pay workers, your business is unsound and should close.
Camelspotting
Maybe they could save money by getting universal healthcare passed so they don't have to pay exorbitant insurance rates.
TheMoonBnuuy
TinyBadger101
Additionally, many (larger) business pay their C-suite exorbitant amounts. Maybe if the CEO didn't earn $120 million + stock options, they'd have more to hand out to their workers?
MCNewYorkLives
Yea, maybe the reason they don't have enough funds to pay their workers fair wages is due to the fact that so many of these markets are flooded with half baked business models that are saturated with copy cats and being run by people with more funds than they have knowledge of that market.
Tekktokk
Amen- 'i can't afford to pay my workers that!' then your business model sucks. I am technically a small business owner and I have subcontracted people and lost money because I planned poorly. Sucks to be me, I just ate that cost.
DarthWaiterSE
Without getting too far into the weeds, I'd like to see the numbers on how many of said businesses are just straight money-laundering with a few extra layers of legitimacy so it looks good on paper.
gizmomelb
that was my opinion during covid when so many coffee shops / cafes closed down.. an over saturated market of pretty much identical goods and services in too small an area. ''but think of the business owners!!" - I did. I thought they were stupid for entering that market in the first place when there was too much competition.
Zange0
Sellers raising prices is also part of supply and demand. Selling fewer goods at a higher price can still increase profit. As long as the demand still exists at that higher price point that's still supply and demand.
TheMoonBnuuy
Can be, but it is not necessarily the dominant factor.
The bird flu thing with the eggs. It mostly affected the low tier egg producers because they have the least sanitary, highest density farms. Low tier egg producers whose eggs sold for $2 a dozen increasing over time to $3 a dozen does NOT affect the supply or demands of high tier egg producers that didn't have bird flu hitting them. And generally a producer will be supplying all or most of a grocery store's supply for that tier.
TheMoonBnuuy
So people who buy the low tier eggs for $2 a dozen, upon having the price increased to $3 a dozen due to legitimate supply and demand issues aren't going to magically start buying the high tier eggs that didn't have bird flu issues and sell at $9 a dozen, but have DECIDED that they're now going to charge $12 a dozen because people won't question it in the middle of a bird flu epidemic.
They're going to stick with the now $3 a dozen eggs, and demand for that tier will fall due to the increased
TheMoonBnuuy
price, and it will NOT end up increasing demand on the higher tier eggs that the people who buy fewer low tier eggs because they can't afford it aren't going to be able to afford the higher tier eggs.
The higher tier eggs only get increased in price because the bird flu is a good smoke screen for the timing, and because they know the market can bear it, because the people who buy the high tier eggs have a LOT more buffer in their budgets.
TheMoonBnuuy
So when you say "sellers raising prices is also a part of supply and demand" you are making a much stronger argument that is ONLY backed by the idealized version of the system. In the REALIZED version of the system, you know, the one we ACTUALLY have in REALITY... the strongest claim you can epistemically make is this: sellers raising prices can be, but is not necessarily driven by supply and demand.