Economic Decisions

On this day:

1419
First Defenestration of Prague: a crowd of radical Hussites kill seven members of the Prague city council.
1502
Christopher Columbus lands at Guanaja in the Bay Islands off the coast of Honduras during his fourth voyage.
1608
At Ticonderoga (now Crown Point, New York), Samuel de Champlain shoots and kills two Iroquois chiefs. This was to set the tone for French-Iroquois relations for the next one hundred years.
1864
American Civil War: Battle of the Crater – Union forces attempt to break Confederate lines at Petersburg, Virginia by exploding a large bomb under their trenches.
1945
World War II: Japanese submarine I-58 sinks the USS Indianapolis, killing 883 seamen.
1971
Apollo program: Apollo 15 Mission – David Scott and James Irwin on the Apollo Lunar Module module Falcon land on the Moon with the first Lunar Rover.
1975
Jimmy Hoffa disappears from the parking lot of the Machus Red Fox restaurant in Bloomfield Hills, Michigan, a suburb of Detroit, at about 2:30 p.m. He is never seen or heard from again, and will be declared legally dead on this date in 1982.

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One of the strongest earthquakes ever recorded struck Russia’s Far East early Wednesday, causing tsunami waves to wash ashore in Japan and Alaska and calls for people around the Pacific to be on alert or move to higher ground.
The 8.8 magnitude temblor set off warnings in Hawaii, North and Central America and Pacific islands south toward New Zealand, with officials warning that the potential tsunami danger may last for more than a day.

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"Capitalism without bankruptcy is like Christianity without hell."--Frank Borman

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Putting kindness back in competition, hotels with more than 60 rooms must pay workers at least $25 an hour from July, rising to $30 for the Olympics, under the bill signed by Mayor Karen Bass on May 27.

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Economic Decisions

Adam Smith explained how wealth develops. von Mises explained pricing.

Without the market forces of supply and demand (the trade that creates these forces) and private ownership of the means of production (which enables supply and demand to operate), all factories and industries would lose access to meaningful profit-and-loss accounting. Accounting signals relay information to owners about the success or failure of their enterprises. Without such accounting, there is no basis for managers to make informed decisions. You have no data on which to base your purchases, investments, production, hiring, wages, inventories, or anything else. You lose touch with the reality of the world around you. Such a system will be, quite literally, irrational and thereby subject to the whims of political elites. (Tucker)

Since pricing cannot guide purchasing, producers cannot anticipate demand or assign products. This creates shortages. And shortages substitute bribery for pricing and creates a culture of corruption.

It is not necessary to destroy an economy, as in Venezuela, to prove the point. There are all sorts of examples of "Socialism Lite" which disable pricing signals and create shortages and distortions. Rent control fixes the price of rental units, diminishing the surplus available for repair and enhancement. So rent control leads to disrepair and shortage. Price controls on gasoline in the 1970s led to gasoline shortages. 

Wage controls in California will reduce job availability.

If you want to eliminate smoking, fix the price of cigarettes.

Somehow, in our culture so obsessed with information, such basic and crucial information is seen as expendable. And the absence of such information is chaos.

How can anyone be casual about such risks? And how can anyone supporting the agent of such danger and corruption present themselves as "moral?"