581
this post was submitted on 25 Dec 2023
581 points (95.5% liked)
World News
32352 readers
967 users here now
News from around the world!
Rules:
-
Please only post links to actual news sources, no tabloid sites, etc
-
No NSFW content
-
No hate speech, bigotry, propaganda, etc
founded 5 years ago
MODERATORS
you are viewing a single comment's thread
view the rest of the comments
view the rest of the comments
Yea devaluing peso from 360 for a dollar to 790 for a dollar instantly meanwhile is such a big brain play.
there is no such thing as a 'natural' price. every price is artificial. OPEC is literally a cartel ffs. The concept of 'artificial' pricing is so libertarian brained.
The invisible hand of Chicago School pseudoscience.
A Mileista friend of mine keep complaining about 140% of inflation a year for the past government, but now that yhey had like 300% in a week suddenly is ok and is just the true price of everything. Of course he dosen't live in Argentina and dosen't has his salary cut by a third in a week so it's ok.
Always the gusanos living outside their countries that back their right-wing nutcases the hardest
I think in his bigbrain libertarian mind, the money market pricing of the peso to usd is what defined the value previously and he decided that the market's pricing is not correct for that of the Argentinian currency.
By devaluing the currency, it makes Argentinian labor and goods comparatively cheaper on the international market. This is a similar move to how China grew at such a tremendous rate in the 90's - they intentionally devalued their currency in order to use foreign investment in their relatively cheap labor pool to fund the creation of their manufacturing industries.
That solution probably won't work here, though. Corporations are scared of investing in countries with unstable political leadership that performs brash actions like his. (Libertarian economics cannot account for such beliefs though since everyone must be a perfectly rational actor that chooses price above all). They are afraid that he may unilaterally nationalize certain industries and claim all assets for the state. Or he may rugpull outside investments and say that all profits must go to the state for some amount of time. Whatever flavor of stupid chainsaw wielding antics he comes up with one day is what they will see and use as a justifiable rationalization for not investing in the devalued market of Argentina.
also China was handpicked by the American capitalists to be the manufacturing hub (cheap currency was a cherry on top). Countries recently forced to devalue currencies haven't had a similar manufacturing boom especially because global economy is doing kinda shit.
also back then there was western industry that could be offshored to china. whose industry's gonna move to argentina now? nobody else with a significant manufacturing sector is stupid enough to do it, after watching the west shoot itself in the foot. or so one would hope...
You're half right here. The idea is that the black market Peso:USD price represents the actual real value of the Peso, while the government's official rate was miles away from this and completely divorced from reality and only remotely sustainable by endless amounts of borrowing, price controls, and money printing, which just contributes to worsening the problem. The hope is that a necessary but painful adjustment to the actual economic reality will eventually provide the stability necessary for real growth.
A smart government will know that, if you want to actually pull this kind of thing off, you need to do everything possible to make the transition as minimally painful as possible and do what you can to help protect the most vulnerable. We'll see how Millei does, but I can't say I'm exactly confident.
Every time I see that phrase it makes my eye twitch. ALL pricing is artificial. Always. No exceptions.
There's a meaningful difference between a government arbitrarily mandating a price and buyers and sellers reaching an equilibrium, whatever you want to label it.
You can say that price controls are worth it in some cases, and plenty of economists would agree with that, but they do come with consequences compared to raw market prices, and we shouldn't ignore that, whatever label we want to use.
Have you seen a middle-eastern market? Of the kind where they bargain. Like in fairy-tales.
That's how markets actually look in the wild.
And the natural price is the mathematical expectation of the price you get by bargaining.
It's very simple and in this particular case "mainstream" economics and libertarian economics get along pretty well.
no. because the prices are influenced by external factors. i live in a country where markets like these exist and the price is not 'natural' in any way, in an idealized world maybe but not in reality.
firstly, transporting any commodity (and inputs such as fertilizers) requires fuel and fuel prices aren't determined by such idealized markets you mentioned, its determined by what cartels and oligopolies want it to be. you are also ignoring subsides, not just by the national governments but foreign governments. for example, developed countries provide a shit ton of subsidies which pull down prices in the international markets, without restrictions and tariffs these displace local production.
there is also the fact that food prices are very inelastic, the seller can push prices very high and the consumer will be forced to accept it because you can't live without food.
i dont really get the middle eastern market you are mentioning because in reality there is absolutely price discrimination going on.
OK. Natural prices exist as an unreachable ideal point, but there are no absolutely natural prices in real world. I agree, and, BTW, no ancap would argue with that.
natural prices can only exist in an environment where every consumer and producer has all the information and is completely rational.
if you are rich and a vegetable seller who typically charges $5 for a vegetable charges you $10 you are unlikely to bargain as you would consider it a waste of your time and energy and just buy it. is this person being rational by not wanting to waste their time or irrational because they aren't squeezing more out of the seller.
read this too
My two comments combined do not contradict what you say.
Thx for the link, I'll look at it
imagine citing a fantasy trope to justify economic policy jfc
I don't need to justify anything to you. It's an example for educational purposes.
EDIT: And if you think it's just a fantasy trope, then you probably haven't been out of your state.
you called it a fairy tale, genius
I wonder what's the longest text you've read in your life and understood anything at all.
Hey aren't you that guy from like a week ago who refused to read a two paragraph article someone linked you?
I remember no such thing, but if you link me the thread, we'll see.
So you haven't.