I'm very interested in hearing opinions/analysis about this scheme from an economist/Austrian School point of view. There seems to be some massive price cuts on certain items and I'm trying to think through how this will play out. From the article I can't see if there is any Government subsidy being used to incentivise the relevant parties who will be taking the price cut. Will they see hoarding by public/certain retailers/scalpers for resale after the cuts are ended? Will there be resale for export of products, maybe tourists from other Asian nations filling suitcases full of goods to take back home? How will it effect the Thai Baht? Such market interventions will effect the price/market mechanism? Up to 87% price cuts seem huge?
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110 sats \ 1 reply \ @TomK 3 Oct 2023
As I understand it they will introduce maximum prices, right? You are right, producers will be trying to export what they can but in general it leads to shortages because companies can't cover their costs and will be limited to scale their production. Real prices will occur on growing black markets that will lead to higher prices to cover legal risks. It's a good strategy to empoverish the middle class and to destroy the poor. Famous historic example: the diocletianean edict that combined price controls with limited freedom of movement...
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0 sats \ 0 replies \ @020996c305 OP 3 Oct 2023
Thanks for the history example. That edict is a good look at the debasing that is so often mentioned that characterised Rome's decline.
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20 sats \ 2 replies \ @TheBTCManual 3 Oct 2023
87% is crazy, I don't know how businesses are going to make money like that, and I can only see a combination of coping mechanisms used to offset that cost
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Shrinkflation, - products get smaller or they are puffed up with toxic chemicals to make them seem like they ar the same, which has terrible downstream effects on health, workforce productivity and puts strain on the health care system
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The currency gets sacrificed with producers and importers getting government subsidies which they don't go always go towards buying financial assets they dump that shit as fast as they get raw materials, machinery, and maybe real estate, so you see increased costs in those sectors
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Job cuts - So everyone from producers to retailers will look to cut costs by moving people out, cutting compensation, or benefits, cutting their hours, automating processes, making the retail experience more shit lol
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Price offsetting - So retail stores will look to add margin on other products that are not mandated to try and recoup their income making the price of other goods more expensive
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Scarcity - People if not limited to how much they can buy will buy up more than they need and you will see a secondary market open up that has a market price, we saw this in the lock downs
The sad part is the longer it can carry on the more people get used to it and budget for it, so they don't prepare for when the subsidy finally breaks, like we saw in Sri Lanka recently
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0 sats \ 1 reply \ @020996c305 OP 3 Oct 2023
Seems the previous Thai government did something similar early in 2022. I've also found this article from early September this year about a cash hand out to all citizens, note the mention of a digital wallet.
https://www.reuters.com/world/asia-pacific/thai-govt-plans-handouts-fuel-prices-cuts-revive-economy-draft-policy-speech-2023-09-06/
A quick look at Thailand's inflation stats and compared to many places it look unbelievably low in the last few months? Do those stats have anything to do with the new government that won the election in May? 🤔https://tradingeconomics.com/thailand/inflation-cpi
Might make sense to look at the feasibility of bitcoin mining there if there electricity prices are kept low.
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10 sats \ 0 replies \ @TheBTCManual 3 Oct 2023
Yeah something doesn't add up, they don't really have the highest debt-to-GDP ratio at like 53% so their debt burdens can't be driving the deflation that much, might be how they decide on their basket or something, found this world bank article about it
https://blogs.worldbank.org/eastasiapacific/deflation-in-thailand
I know they were heavily reliant on tourism, which got crushed and never really hit the heights of prior to 2019, so that capital drying up could still have been working through the system as markets adjusted
But I am really thumb-sucking at this point,
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10 sats \ 1 reply \ @Ribbit 3 Oct 2023
Indonesia is also trying to limit eCommerce.
These are all forms of price controls.
Price controls conceal real world signals and always end up hurting.
My opinion is a limited control program "might" help. Such as during the shock of Covid-19 bs. Something like emergency money/supplies help. But beyond a week to a month, all initiatives should be stopped. But that's because i favor minarchism with a lean towards voluntarism.
A really good book from the Austrian perspective on this is the series "Defending the Undefendable: Price Gouging" https://austriancenter.com/defending-the-undefendable/
It's a real mind fuck, most of us are thinking about these things incorrectly.
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0 sats \ 0 replies \ @020996c305 OP 5 Oct 2023
Thanks for the book info. Got that scheduled for my next read. I agree it's maybe possible a temporary consumption stimulus might help in the very short term but I see that in this current Thailand case it's a payment stimulus to all Thai citizens plus, what seems like, a very radical cut in prices for a whole lot of goods and services. Obviously the government has paid for the distribution of money to citizens but I'm not sure whether the agreement with manufacturers/retailers to slash prices has been made by the government subsidising the cuts or if manufacturers/retailers "volunteered" to help. I imagine politics and business/government connections might have to be considered! I'll be watching with interest what happens in their economy over the next few months.
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