This is not how supply and demand works. Businesses can’t just arbitrarily raise prices unless consumers are willing to pay them. Do you think they were artificially keeping prices low until now? Obviously not. They are always trying to charge as much as they can, and consumers are always trying to pay as little as they can. The final sale price is whatever both parties think is fair.
Of course there are exceptions such as when businesses engage in price fixing or achieve monopolies, but that’s not what’s going on here. What’s happening is that everything in the economy is connected. Even goods that aren’t directly tariffed are still affected by tariffs. If you planned to buy a new washing machine, but now they’re too expensive because of a tarrif, then maybe you buy a microwave instead. If a lot of people do this, then the increased demand for microwaves will cause their price to go up.
Even goods that aren’t directly tariffed are still affected by tariffs. If you planned to buy a new washing machine, but now they’re too expensive because of a tarrif, then maybe you buy a microwave instead.
What? If I need a new washing machine, I’m either buying a new washing machine or doing laundry in the bathtub. I’m not going to decide to buy a second microwave for clothes when the microwave i already have is perfectly functional…for food.
The type of market you’re describing, where the buyer and the seller both have a say in determining prices, only happens in small, locally focused markets. The type of market that’s being undercut and eventually replaced outright by Wal-Mart and other big box corporate stores (with our tax dollars,by the way!) that absolutely don’t give a fuck what the buyer wants to pay, because they have enough people that are complacent, desperate, fatigued, or out-of-touch enough to pay whatever they charge. If they can point to something tangible as an external cause of higher prices, they’ll absolutely do it. We saw it happen with COVID, wage increases, tax proposals, and all sorts of other shit.
A “free market” that doesn’t include freedom for the consumer isn’t a free market at all.
Maybe my example wasn’t clear; I don’t mean that you would buy a microwave if you already have one, I mean that you will spend your money on something else if you can’t afford the washing machine. Some goods are tightly correlated with each other such that if the price of one goes up (e.g. due to tariff), the price of the other will go up as well because it’s a partial alternative.
The type of market you’re describing…only happens in small, locally focused markets
This is not true; supply and demand applies in any open market, with the exception of monopolies and collusion which I already pointed out. Yes, WalMart/Home Depot/etc engage in anti-competitive business practices, but they still can’t arbitrarily charge whatever they want, which is what it sounds like the Axios article is saying. If they could, then why did they wait for the looming threat of tariffs to raise their prices? Why haven’t they been charging exorbitant prices all along?
If I need an air conditioner, I’m going to buy an air conditioner because I need one, whether it’s $100 or $300. If I need a new exhaust to get my car to pass inspection, I literally need to pay whatever it costs unless it’s so expensive that it would be cheaper to buy a new car (which, considering that all cars have exhaust, is unlikely).
This model of economics is complete fiction when it comes to essentials. If you’re talking about optional purchases? Yeah, maybe. But when you’re talking about things people actually need? That’s not how it works.
Otherwise we’d all have stopped paying exorbitant rents a decade ago. But we can’t, because people need homes.
Competition may prevent companies from charging completely arbitrary amounts for everything, but if the only control is being somewhat close to what other companies charge that means the price is going to gradually rise. In a world where corporations are expected to increase their profits every quarter, the entire market is incentivized to continually hike their prices with the cooperation of the rest of the market. They all just have to decide they want more money. It’s a death spiral.
Tell me you’ve never had to Jerry rig something because you got priced out of that market without telling me.
The final sales price for something from a mega corporation is whatever the mega corporation wants you to pay. If they only sell washing machines for 1200 dollars, but I won’t buy a washing machine for that, then I just don’t get a washing machine. Have you never been to a store in America? You don’t haggle over the price of an appliance with the cashier at Walmart or Home Depot. And some dumb fuck will be right behind you ready to take out a small loan to pay for his new washing machine. So the corporation doesn’t really see the loss in revenue.
You don’t directly haggle with retailers, but if $1200 is more than you want to spend, then you simply don’t buy the washing machine, and you look for an alternative like jerry rigging the one you already own, using the laundromat, or looking for a better deal from another seller. Not buying something is effectively haggling.
Washing machine prices have been going down since at least 1977, which is as far back as I can find data while I’m on mobile. From the US bureau of labor statistics you can see that laundry equipment priced at $500 in 1977 is now priced at $768. And, due to inflation, $500 in 1977 has the same buying power as $2647 today. In other words, washing machines have gone down in price about 70% in the last 50 years.
This is not how supply and demand works. Businesses can’t just arbitrarily raise prices unless consumers are willing to pay them. Do you think they were artificially keeping prices low until now? Obviously not. They are always trying to charge as much as they can, and consumers are always trying to pay as little as they can. The final sale price is whatever both parties think is fair.
Of course there are exceptions such as when businesses engage in price fixing or achieve monopolies, but that’s not what’s going on here. What’s happening is that everything in the economy is connected. Even goods that aren’t directly tariffed are still affected by tariffs. If you planned to buy a new washing machine, but now they’re too expensive because of a tarrif, then maybe you buy a microwave instead. If a lot of people do this, then the increased demand for microwaves will cause their price to go up.
What? If I need a new washing machine, I’m either buying a new washing machine or doing laundry in the bathtub. I’m not going to decide to buy a second microwave for clothes when the microwave i already have is perfectly functional…for food.
The type of market you’re describing, where the buyer and the seller both have a say in determining prices, only happens in small, locally focused markets. The type of market that’s being undercut and eventually replaced outright by Wal-Mart and other big box corporate stores (with our tax dollars,by the way!) that absolutely don’t give a fuck what the buyer wants to pay, because they have enough people that are complacent, desperate, fatigued, or out-of-touch enough to pay whatever they charge. If they can point to something tangible as an external cause of higher prices, they’ll absolutely do it. We saw it happen with COVID, wage increases, tax proposals, and all sorts of other shit.
A “free market” that doesn’t include freedom for the consumer isn’t a free market at all.
Maybe my example wasn’t clear; I don’t mean that you would buy a microwave if you already have one, I mean that you will spend your money on something else if you can’t afford the washing machine. Some goods are tightly correlated with each other such that if the price of one goes up (e.g. due to tariff), the price of the other will go up as well because it’s a partial alternative.
This is not true; supply and demand applies in any open market, with the exception of monopolies and collusion which I already pointed out. Yes, WalMart/Home Depot/etc engage in anti-competitive business practices, but they still can’t arbitrarily charge whatever they want, which is what it sounds like the Axios article is saying. If they could, then why did they wait for the looming threat of tariffs to raise their prices? Why haven’t they been charging exorbitant prices all along?
If I need an air conditioner, I’m going to buy an air conditioner because I need one, whether it’s $100 or $300. If I need a new exhaust to get my car to pass inspection, I literally need to pay whatever it costs unless it’s so expensive that it would be cheaper to buy a new car (which, considering that all cars have exhaust, is unlikely).
This model of economics is complete fiction when it comes to essentials. If you’re talking about optional purchases? Yeah, maybe. But when you’re talking about things people actually need? That’s not how it works.
Otherwise we’d all have stopped paying exorbitant rents a decade ago. But we can’t, because people need homes.
Competition may prevent companies from charging completely arbitrary amounts for everything, but if the only control is being somewhat close to what other companies charge that means the price is going to gradually rise. In a world where corporations are expected to increase their profits every quarter, the entire market is incentivized to continually hike their prices with the cooperation of the rest of the market. They all just have to decide they want more money. It’s a death spiral.
Tell me you’ve never had to Jerry rig something because you got priced out of that market without telling me.
The final sales price for something from a mega corporation is whatever the mega corporation wants you to pay. If they only sell washing machines for 1200 dollars, but I won’t buy a washing machine for that, then I just don’t get a washing machine. Have you never been to a store in America? You don’t haggle over the price of an appliance with the cashier at Walmart or Home Depot. And some dumb fuck will be right behind you ready to take out a small loan to pay for his new washing machine. So the corporation doesn’t really see the loss in revenue.
You don’t directly haggle with retailers, but if $1200 is more than you want to spend, then you simply don’t buy the washing machine, and you look for an alternative like jerry rigging the one you already own, using the laundromat, or looking for a better deal from another seller. Not buying something is effectively haggling.
When have washing machine prices ever gone down due to this? Not sales, the ticket price.
Washing machine prices have been going down since at least 1977, which is as far back as I can find data while I’m on mobile. From the US bureau of labor statistics you can see that laundry equipment priced at $500 in 1977 is now priced at $768. And, due to inflation, $500 in 1977 has the same buying power as $2647 today. In other words, washing machines have gone down in price about 70% in the last 50 years.
This is exactly how supply and demand works.