Planned economies don’t necessarily kill everyone one, but they are bad because they disguise the price signals even more. Meaning that, GDP is bad because it only includes certain things and excludes others ( household labor). Planned economies have no price signals, so you don’t know if what you’re doing works.
Planned economies only measure quantities of goods, not quality. So you will see statistics like tons of wheat or steel produced. What quality wheat? What quality steel? That’s what prices tell you.
This is just asserting things as fact with no reasoning behind it, why would you need prices to determine if things are working? Do you use prices to determine if your food tastes good?
You’re not going to read this, but I might as well explain it.
You are asking me to give a reason for the sky being blue, without looking outside. Just think about it for a minute. In general, higher quality things are more expensive. This isn’t about “taste” but higher quality products that the average buyer would agree on:
A price signal is information conveyed to consumers and producers, via the prices offered or requested for, and the amount requested or offered of a product or service, which provides a signal to increase or decrease quantity supplied or quantity demanded.
What you think tastes good doesn’t matter. Imagine there’s a shortage of something (oranges for example) due to a poor crop harvest. The price of oranges will rise when the market learns this information. This helps compensate farmers who lost part of their crop and signals to the average consumer that they should buy fewer oranges.
In a normal competitive market, these prices decrease when supply increases to normal. The price signal tells the consumer they can buy more oranges again without them needing to consult a crop report.
It also tells the producers and the government what people think about purchasing that product. If they like it, they pay for it. These signals can be distorted by lack of competition or market access issues, but are better than asking everyone “does the food taste good?”
Planned economies don’t necessarily kill everyone one, but they are bad because they disguise the price signals even more. Meaning that, GDP is bad because it only includes certain things and excludes others ( household labor). Planned economies have no price signals, so you don’t know if what you’re doing works.
Planned economies only measure quantities of goods, not quality. So you will see statistics like tons of wheat or steel produced. What quality wheat? What quality steel? That’s what prices tell you.
This is just asserting things as fact with no reasoning behind it, why would you need prices to determine if things are working? Do you use prices to determine if your food tastes good?
You’re not going to read this, but I might as well explain it.
You are asking me to give a reason for the sky being blue, without looking outside. Just think about it for a minute. In general, higher quality things are more expensive. This isn’t about “taste” but higher quality products that the average buyer would agree on:
https://en.wikipedia.org/wiki/Price_signal
What you think tastes good doesn’t matter. Imagine there’s a shortage of something (oranges for example) due to a poor crop harvest. The price of oranges will rise when the market learns this information. This helps compensate farmers who lost part of their crop and signals to the average consumer that they should buy fewer oranges.
In a normal competitive market, these prices decrease when supply increases to normal. The price signal tells the consumer they can buy more oranges again without them needing to consult a crop report.
It also tells the producers and the government what people think about purchasing that product. If they like it, they pay for it. These signals can be distorted by lack of competition or market access issues, but are better than asking everyone “does the food taste good?”