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| Dilan |
 Posted: Fri Feb 16, 2007 6:35 pm Post subject: What is "price support measures" and "self-im |
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Forum Freshman
Joined: 03 Feb 2007
Posts: 26
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I am not sure about price support measures, what does this actually mean? Is it like a measuring of the subsidies?
And self-imposed quota, does it mean like an export quota?
Thanks alot  |
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| Cat1981(England) |
| Posted: Sat Feb 17, 2007 8:26 am Post subject: Re: What is "price support measures" and "sel |
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Forum Ph.D.
Joined: 09 Sep 2006
Posts: 925
Location: Mind your own business
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| Dilan wrote: |
I am not sure about price support measures, what does this actually mean? Is it like a measuring of the subsidies?
And self-imposed quota, does it mean like an export quota?
Thanks alot |
As i understand it, "price support measures" is were by a government limits the minimum price of a produce. To do this they may need to subsidise an industry or raise import tax's to keep that industry profitable in their own country. Two good examples of this are.......
http://en.wikipedia.org/wiki/Common_Agricultural_Policy (Europe)
http://www.bbc.co.uk/worldservice/learningenglish/newsenglish/witn/030328_bwitn.shtml (USA)
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A self-imposed quota (depending on what it was referring to) would mean to limit your self to a specific number. For example, if i was the prime minister of the United Kingdom, i could set a self imposed quota of no more than 100 whales to be killed in British waters per year.
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When we talk to God it's called a prayer. When God talks back it's called schizophrenia. |
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| Dilan |
| Posted: Sat Feb 17, 2007 8:36 am Post subject: Thanks |
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Joined: 03 Feb 2007
Posts: 26
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hi,
Thanks alot. This is really useful.
Thanks again
Dilan |
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| charles brough |
| Posted: Fri Feb 23, 2007 12:36 pm Post subject: |
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Forum Bachelors Degree
Joined: 19 Jun 2005
Posts: 422
Location: joplin MO USA
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Price suppots and rationing are probably the most dangerous proceedures to the capitalistic system that exist. The whole system works only because prices seek their own level.
Price supports come in when special interests bribe the govcernment to support their prices and give them an economic advantage. In times of great stress and inflation, the public demands price supports and rationing. The politicans go along with it and the result is the buildup of bureacracy at heavy cost and which exaserbates the problem by further jacking up the federal debt. People cheat widely with the rationing and penalties for getting an extra ration of something can and have in the past gotten serious enough for a person to be executed.
charles, http://humanpurpose.simplenet.com |
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| kojax |
| Posted: Sun May 27, 2007 12:42 am Post subject: |
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Joined: 27 Mar 2007
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Yeah, you can't trust a government to do anything as complicated as administering a price support. If you could, it would be a really good idea in some situations.
Its best use is as a temporary measure to give businesses a chance to get out of an industry without losing their shirts, or to help an industry get started. Basically, you're guarunteeing them profitability for as long as the price support lasts.
It's essential that it be only short term, but with our government it hardly ever is. |
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| charles brough |
| Posted: Fri Jun 29, 2007 3:33 pm Post subject: |
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Forum Bachelors Degree
Joined: 19 Jun 2005
Posts: 422
Location: joplin MO USA
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| kojax wrote: |
Yeah, you can't trust a government to do anything as complicated as administering a price support. If you could, it would be a really good idea in some situations.
Its best use is as a temporary measure to give businesses a chance to get out of an industry without losing their shirts, or to help an industry get started. Basically, you're guarunteeing them profitability for as long as the price support lasts.
It's essential that it be only short term, but with our government it hardly ever is. |
I am surprised to find I disagree with you there. I think rationing is never good in a capitalistic society. Prices should all seek their own level, the higher they go, the more they cut demand
Also, I don't see it as a government failure but a failure of the public. In a commune, goods are distributed more or less evenly to people. Sharing is the way of life. It works when ideological idealism is intense. When it is not, capitalism is the only way to go.
But if people are not idealistic and they need the capitalistic system, then they do not function well trying a rationing share and share alike system! And government cannot make them.
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charles, http://humanpurpose.simplenet.com |
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| kojax |
| Posted: Fri Jul 13, 2007 12:07 am Post subject: |
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Forum Ph.D.
Joined: 27 Mar 2007
Posts: 970
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Well, a problem any darwinistic system will face from time to time is what I call "unnecessary attrition".
A perfectly functional business, with useful capital (like factories, machinery, and such), and well organized and capable people, can fall victim to a sudden random event. If they are bailed out, they might continue to be a functional, contributing member of society. If not, then they go under and there are fewer jobs, and less production because of it.
It's not wise to perpetually bail out a perpetually failing business or industry, but it can be wise in some cases to bail them out of an unexpected catastrophe.
If a sudden, unforseeable, event in the industry has thoroughly ruined demand for the product they make, then price support is often the most efficient way to bail them out. Instead of giving them money directly, you're giving them time to adapt.
This changes it from a sudden, out of the blue, drop to a drop that's coming in oh....... say........ 6 months from now with plenty of warning. (if the government has the sense to put a 6 month time limit on the price support)
Example:
Lets say Intel found a way to make a 20 terahertz processor tommorrow. AMD would be pretty much out of business overnight, and there'd only be one major CPU manufacturer in the world.
With a temporary price support in place, AMD would have time to switch over to another industry, (or work on their own 20 thz processor if it's not a patented thing) Why kill off a perfectly functional corporation if we can save it? |
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