In a free market, price, weight, and quality would all fluctuate, so the system would be flexible at those points. Legislating two of those variables to be fixed would seem to leave the third responsible for reflecting economic changes, despite diminishing returns on changing it when the other two haven’t been adjusted at all.
Avoiding degrading quality wouldn’t be hard, one would set the price higher than the free market would have borne, so bakers have to compete for what inelastic demand there is by improving quality alone. The cost to society is the absence of cheaper, lower quality bread, which would be a reasonable policy choice.
If the legislated price were too low, bakers would compete on low manufacturing costs, and quality should spiral downward.
It seems controllable whether the cost of regulation is quality or affordability.
I hope someone shows up with knowledge of the actual history.
I’m assuming it wasn’t a price floor—that would make bread less affordable. I believe that subsidy to manufacturers + price controls leads to decline in quality because the incentives become doing just enough to meet the regulations and competing to get permissions and subsidies from the government.
By libertarian standards, this should be just about impossible. Or maybe it’s like winning the lottery—you might succeed, but the odds are so low that it’s a very bad strategy.… and, of course, the French aristocracy’s spendthrift ways and insulation did lead to the French Revolution, and a utilitarian might say that any amount of delightful food and fashion just isn’t worth it.
Still, picking winners on that scale is amazing. Does it take the unlikely combination of really smart person at the top chasing their own fascinations without those fascinations being too crazy rather than trying to guess what other people want?
It’s telling that the Quatorze winner-picking you single out are in “high fashion, fine food, chic cafes, style, sophistication, and glamour.” It’s notoriously difficult to find objective measures of quality in those sectors.
17th century England was far more “libertarian” than 17th century France. And more prosperous too, right?
I hope someone shows up with knowledge of the actual history.
Googling turns up some sources, so if you’re really interested this sounds like the type of project to hone (y)our scholarship skills on, rather than passively wait for someone knowledgeable. The book linked to suggests that the rise in quality coincident with price controls (I don’t know about subsidies but I can confirm the price controls) is a recent phenomenon, so data should be readily available.
This is a great “applied rationality” question IMO—you’ve noticed a clash between some doctrine that you hold and some external evidence. Suggestion: make a Discussion top-level post, making a little more precise where the clash lies, to coordinate the finding and reporting of relevant evidence.
It is entirely unsurprising that prerevolutionary France should be the leading market for high style, fashion, and luxury goods, and entirely unsurprising that it should be the leading producer. I am inclined to doubt that Louis XIV created winners, though doubtless he picked them, the latter being much less surprising.
I’m assuming it wasn’t a price floor—that would make bread less affordable.
You agree that the effect of a high floor would be higher quality, but doubt such a law wold be enacted because of the unpopularity of raising food proces?
I believe that subsidy to manufacturers + price controls leads to decline in quality
If a higher than free market price floor raises quality, and subsidies per unit lower it, and a high price floor is politically unpopular as it would raise food prices, a subsidy lowering the free market price and a floor above that new price would still raise quality, depending on the variables.
trying to guess what other people want?
Much better to be able to change what other people want. Guessing is so hard!
I’m assuming it wasn’t a price floor—that would make bread less affordable.
You agree that the effect of a high floor would be higher quality, but doubt such a law wold be enacted because of the unpopularity of raising food proces?
No, I’m not sure what the effect of a price floor would be on quality (it seems to me it could be positive, negative, or neutral), but I don’t have to care because I don’t think a price floor would be politically possible under the circumstances.
I’m not convinced it’s possible to reliably change what people want.
I don’t have to care because I don’t think a price floor would be politically possible under the circumstances.
If you think subsidies politically possible, and subsidies would lower food prices, wouldn’t subsidies and a price floor be politically possible together? Then, if the floor raised quality more than subsidies lowered it, couldn’t there be a net increase in quality?
The point of not having a price floor is that the political pressure is to keep bread affordable.
I’ve ordered the book about the history of French bread, though I don’t have tremendous faith that there will be enough about politics and economics to answer the question of how a controlled market maintained high quality.
I’m fantasizing that there were panels of bakers doing blind tests of the flour, but really I’m guessing.
Even if you choose to buy it, pour it immediately into some airtight, resealable package (e.g. a metallic box). The second important factor is the granularity. Finely grained, dust-like tea is a by-product of tea production. Selling it as tea is a consequence of the typical capitalist rush for efficiency that sacrifices quality on the altar of productivity. Don’t buy dust swept off the floor. The other extreme is the rough tea possibly containing parts of the tea plant other than the leaves. This is due to the careless treatment characteristic of planned economies. Underpaid slaves or irresponsible workers who get paid no matter how badly they work are prone to such crimes
I believe competence happens when there’s enough pressure for accomplishment, but not too much.
The point of having a minimum wage is to help low wage earners. Would it be politically difficult to lower the minimum wage by 15 cents? I assume so, and resistance would be motivated by direct concern for the poor.
Would it be politically difficult to simultaneously, in a single bill, lower the minimum wage by 15 cents, slightly raise all taxes, and provide a transfer of hundreds of dollars per month to every person in your country? Also yes, but for different reasons entirely, having nothing proximately to do with direct concern for the poor. Combining the measures would eliminate the previous political objections, like a strong wave swamping weak one.
In practice, some laws have establish fixed prices. A fixed price law is the same as a bill with two laws establishing a floor and a ceiling. Such laws have not been politically impossible in history, and a compromise bill needn’t satisfy various constituencies by containing laws of parallel structure (i.e. limits to a price range).
I don’t think one can say a measure (especially one strongly supported by a minority) would not be politically feasible alone and consequently conclude it would not be the outcome of a compromise political process.
How much could one pick winners by simply throwing the force of your big monarchy behind them and then just relying on inertia? If a sufficiently powerful organization is set up as being culturally considered best at something that gives them a possible long-term advantage even if there’s no objective standard by which theirs is better.
The first one is asymmetry of information in economics : the information on price in much easier to have, and with more confidence, than the information on quality. So customer have a more complete information about pricing (when we speak of bread at least, it may not be the case with complex debt schemes) than on quality, which makes competing on the price more efficient (in term of dragging customer) than competing on the quality.
The second one is in economies of scale : by fixing the price of bread to a value low enough for people to afford it, but high enough for bakers to not go bankrupt, it’ll increase the demand for bread, decreasing the production cost of each single bread. Economies of scale can often counterbalance the law of supply and demand (or more exactly, they violate the hypothesis on which the law of supply and demand is built, making it inapplicable), and are badly underestimated in the usual formulations of economical liberalism.
by fixing the price of bread to a value low enough for people to afford it, but high enough for bakers to not go bankrupt,
My understanding is that France at one point (Paris in charge) fixed the price of bread artificially low, to benefit Paris at the expense of the peasantry, with utterly disastrous consequences (famine, urban riots, and terror against the peasantry), and much later, after the Paris commune was overthrown and the leadership of the rural militias was in charge, fixed the price of bread artificially high, to benefit the farmers at the expense of the city folk.
I conjecture that it is this latter regime that produced competition on quality.
How did France manage to have subsidized and/or price controlled bread without degrading the quality?
In a free market, price, weight, and quality would all fluctuate, so the system would be flexible at those points. Legislating two of those variables to be fixed would seem to leave the third responsible for reflecting economic changes, despite diminishing returns on changing it when the other two haven’t been adjusted at all.
Avoiding degrading quality wouldn’t be hard, one would set the price higher than the free market would have borne, so bakers have to compete for what inelastic demand there is by improving quality alone. The cost to society is the absence of cheaper, lower quality bread, which would be a reasonable policy choice.
If the legislated price were too low, bakers would compete on low manufacturing costs, and quality should spiral downward.
It seems controllable whether the cost of regulation is quality or affordability.
I hope someone shows up with knowledge of the actual history.
I’m assuming it wasn’t a price floor—that would make bread less affordable. I believe that subsidy to manufacturers + price controls leads to decline in quality because the incentives become doing just enough to meet the regulations and competing to get permissions and subsidies from the government.
It’s possible that France exists to annoy libertarians. Essence of Style: How the French Invented High Fashion, Fine Food, Chic Cafes, Style, Sophistication, and Glamour (a book I’ve heard an interview about but not read) tells the story of Louis XIV making France into a world center of style. He picked winners, or created them. He promoted companies which continued to make high quality goods for centuries.
By libertarian standards, this should be just about impossible. Or maybe it’s like winning the lottery—you might succeed, but the odds are so low that it’s a very bad strategy.… and, of course, the French aristocracy’s spendthrift ways and insulation did lead to the French Revolution, and a utilitarian might say that any amount of delightful food and fashion just isn’t worth it.
Still, picking winners on that scale is amazing. Does it take the unlikely combination of really smart person at the top chasing their own fascinations without those fascinations being too crazy rather than trying to guess what other people want?
It’s telling that the Quatorze winner-picking you single out are in “high fashion, fine food, chic cafes, style, sophistication, and glamour.” It’s notoriously difficult to find objective measures of quality in those sectors.
17th century England was far more “libertarian” than 17th century France. And more prosperous too, right?
Googling turns up some sources, so if you’re really interested this sounds like the type of project to hone (y)our scholarship skills on, rather than passively wait for someone knowledgeable. The book linked to suggests that the rise in quality coincident with price controls (I don’t know about subsidies but I can confirm the price controls) is a recent phenomenon, so data should be readily available.
This is a great “applied rationality” question IMO—you’ve noticed a clash between some doctrine that you hold and some external evidence. Suggestion: make a Discussion top-level post, making a little more precise where the clash lies, to coordinate the finding and reporting of relevant evidence.
The Führerprinzip.
Committees will always produce crap.
It is entirely unsurprising that prerevolutionary France should be the leading market for high style, fashion, and luxury goods, and entirely unsurprising that it should be the leading producer. I am inclined to doubt that Louis XIV created winners, though doubtless he picked them, the latter being much less surprising.
You agree that the effect of a high floor would be higher quality, but doubt such a law wold be enacted because of the unpopularity of raising food proces?
If a higher than free market price floor raises quality, and subsidies per unit lower it, and a high price floor is politically unpopular as it would raise food prices, a subsidy lowering the free market price and a floor above that new price would still raise quality, depending on the variables.
Much better to be able to change what other people want. Guessing is so hard!
No, I’m not sure what the effect of a price floor would be on quality (it seems to me it could be positive, negative, or neutral), but I don’t have to care because I don’t think a price floor would be politically possible under the circumstances.
I’m not convinced it’s possible to reliably change what people want.
If you think subsidies politically possible, and subsidies would lower food prices, wouldn’t subsidies and a price floor be politically possible together? Then, if the floor raised quality more than subsidies lowered it, couldn’t there be a net increase in quality?
The point of not having a price floor is that the political pressure is to keep bread affordable.
I’ve ordered the book about the history of French bread, though I don’t have tremendous faith that there will be enough about politics and economics to answer the question of how a controlled market maintained high quality.
I’m fantasizing that there were panels of bakers doing blind tests of the flour, but really I’m guessing.
Meanwhile, something to contemplate from a fine essay about samovars:
I believe competence happens when there’s enough pressure for accomplishment, but not too much.
An analogy:
The point of having a minimum wage is to help low wage earners. Would it be politically difficult to lower the minimum wage by 15 cents? I assume so, and resistance would be motivated by direct concern for the poor.
Would it be politically difficult to simultaneously, in a single bill, lower the minimum wage by 15 cents, slightly raise all taxes, and provide a transfer of hundreds of dollars per month to every person in your country? Also yes, but for different reasons entirely, having nothing proximately to do with direct concern for the poor. Combining the measures would eliminate the previous political objections, like a strong wave swamping weak one.
In practice, some laws have establish fixed prices. A fixed price law is the same as a bill with two laws establishing a floor and a ceiling. Such laws have not been politically impossible in history, and a compromise bill needn’t satisfy various constituencies by containing laws of parallel structure (i.e. limits to a price range).
I don’t think one can say a measure (especially one strongly supported by a minority) would not be politically feasible alone and consequently conclude it would not be the outcome of a compromise political process.
How much could one pick winners by simply throwing the force of your big monarchy behind them and then just relying on inertia? If a sufficiently powerful organization is set up as being culturally considered best at something that gives them a possible long-term advantage even if there’s no objective standard by which theirs is better.
Good question. One way of testing it would be to see whether other monarchies have tried anything like it, and if so, whether they succeeded.
It comes from two different main reasons to me.
The first one is asymmetry of information in economics : the information on price in much easier to have, and with more confidence, than the information on quality. So customer have a more complete information about pricing (when we speak of bread at least, it may not be the case with complex debt schemes) than on quality, which makes competing on the price more efficient (in term of dragging customer) than competing on the quality.
The second one is in economies of scale : by fixing the price of bread to a value low enough for people to afford it, but high enough for bakers to not go bankrupt, it’ll increase the demand for bread, decreasing the production cost of each single bread. Economies of scale can often counterbalance the law of supply and demand (or more exactly, they violate the hypothesis on which the law of supply and demand is built, making it inapplicable), and are badly underestimated in the usual formulations of economical liberalism.
My understanding is that France at one point (Paris in charge) fixed the price of bread artificially low, to benefit Paris at the expense of the peasantry, with utterly disastrous consequences (famine, urban riots, and terror against the peasantry), and much later, after the Paris commune was overthrown and the leadership of the rural militias was in charge, fixed the price of bread artificially high, to benefit the farmers at the expense of the city folk.
I conjecture that it is this latter regime that produced competition on quality.
When the maximum was first applied, the price of bread was controlled down, there were food riots, so it would seem that they did degrade the quality.
However, when the price of bread was controlled up, rather than controlled down, that did not affect the quality, and arguably improved it.