Categories
Economics

[1623] Of price and supply control in Malaysia

This is just for my own future use.

Following is the list of 11 price-controlled items:

  1. Petrol
  2. Diesel
  3. Liquefied petroleum gas
  4. Steel
  5. Cement
  6. Flour
  7. Sugar
  8. Condensed milk
  9. Bread
  10. Chicken
  11. Cooking oil

Following is the list of 20 supply-controlled items,
whereby supplies are regulated ensure demand is always met.

  1. Sugar
  2. Milk (including condensed, powdered milk, cream)
  3. Salt
  4. Cement and clinker
  5. Flour
  6. Cooking oil
  7. Fertiliser
  8. Insecticide
  9. Formic acid
  10. Mild steel, round bar
  11. Kerosene
  12. Preserved fish
  13. Rice (in Sabah state only)
  14. Paddy (in Sabah state only)
  15. Petrol
  16. Diesel
  17. Liquefied petroluem gas
  18. Bread
  19. Fuel
  20. Chicken [Malaysia’s web of price and supply controls. Reuters. March 26 2008]

What are the implications of the two control methods?

Price control will cause shortage or surplus when the list prices are disconnected from that of the market. Shortage occurs when prices are set lower than it should be. Producers will not have the incentive to produce as much as the level they would produce under free market condition while consumers will demand more than what they would normally do under free market. When surplus occurs, prices are simply set too high compared to what free market would call for; producers will produce too much and consumers will demand too little.

Supply control affects only the supply curve but it distorts the market nonetheless. This method forces prices that consumers pay to go higher than what equilibrium would otherwise produce when supply is set less than free market quantity. This is a producer-friendly policy as producers are able to charge consumers with higher prices than what free market would dictate. In other words, shortage is beneficial to producers. The exact opposite of the mechanics is true when supply is set higher than equilibrium.

The two methods reach roughly the same conclusion but the dimensions which each method tackles must be noted.

The two methods have one common characteristic: it amplifies an effect called price stickiness. There is always a lag in updating the set prices or quantity to match the prevailing situation of the market. In that way, these controls are inferior to free market mechanism as information disperses among participants of the market faster than those in the state responsible for the controls could react.

That brought me to an intriguing question: if those in the state could react faster to some relevant information with those controls compared to those in the market, would that make the market as an inferior tool to the controls?

Maybe that is a good thesis to explore. Hmm…

And I am done with my mental masturbation for today.

Categories
Activism Environment

[1622] Of come celebrate Earth Day with MNS

The nature guides of the Malaysian Nature Society will be celebrating the Earth Day with a morning walk at Bukit Nanas Forest Park, right in the middle of Kuala Lumpur.

If you are interested, wake up early tomorrow and meet us at 08:00 at the car park next to the Bukit Nanas Forest Park Complex on Jalan Raja Chulan.

And yes, I know that Earth Day falls on April 22, not April 20.

Categories
Economics

[1621] Of Rousseau is back at Michigan!

One of my favorite professors, Peter Rousseau of Vanderbilt is back at Michigan!

From my mailbox:

I have very exciting news!!! ECON 435 (Financial Economics) is back! The instructor will be Peter Rousseau , a visitor professor coming from Vanderbilt University. His website is: http://sitemason.vanderbilt.edu/econ/rousseau.

If you Wolverines want some good times while doing upper level economics, this is it.

For your information, he is the professor that I referred to in the entry about the Hunt Brothers.

Categories
Liberty

[1620] Of coercion-backed bias is the issue

Culture strongly affects our takes on issues. Our biases, at least partly, are influenced by our experience. We all have our own biases and that are not usually bad. In a free society, competition of ideas flourishes and that competition necessarily includes biases. What makes biases unacceptable however is when it involves coercion.

All of us are entitled to our opinion, be it contemporary, forward looking or ones that truly belong to the dark ages. Where liberty reigns, individuals are free to express their thoughts.

Just like individuals, institutions have biases of their own and so too the media. Despite the fact the ethics of journalism calls for neutrality in reporting, I am not overly concerned with biases promoted by the media, regardless of its political sympathies. After all, these media themselves are run by individuals whom they themselves maintain their own biases. While I do appreciate objectivity in reporting, there is really no way to fully enforce such ethical demand without applying coercion. Furthermore, pursue of neutrality itself maybe subjective.

In the end, it is up to our mental faculty to decipher an event and wade through any bias that might cloud the objectivity of the news.

Biases usually worry me when there is coercion involved. For instance, when a supposedly impartial arbiter or judges whom have coercive power exhibits bias. Or when the media are controlled by the state which has censor power. Monopoly of information is bad enough in spite of still being within voluntary sphere but biases backed with threats go beyond monopoly.

The accusation thrown at western media — read non-pro-PRC media — by the People’s Republic of China is a suitable example where biases are backed by threat.

The recent unrest in Tibet has put the PRC in a unfavorable spotlight. With international media seemingly sympathetic to the Tibetan cause, coupled PRC’s atrocious record in violation of liberty as background and the upcoming Beijing Olympics, the call for free Tibet has grown considerably stronger than it has in recent past. Apart from calls for partial or full boycott, the Olympic Torch Relay has seen protest in various cities.

The PRC is noticeably annoyed and has taken swiped at international media that contributed to stronger support for Tibetan independence, calling them biased. Regardless of the beef of the accusation, the PRC made it as if only those media are biased whereas media controlled by the ruling communist party in PRC are biased themselves.

The hypocrisy of the PRC notwithstanding, I am unperturbed with biases exemplify by any side. What concerns me is the status of media within the PRC. In fact, because of the lack of free press in the PRC, I find it is easy to ignore the PRC’s claim. If the PRC is honest about its accusation of bias, then the PRC government must refrain from controlling the media by virtue of having exclusive access to legal — in descriptive terms — coercion. It must stop enforcing its biases over the media.

Between biases under a situation of unfree press, it is free press, or the perception of free press that will appeal to a third person. A free press does a better job at influencing others than controlled press. This is true in Malaysia where alternative media gained credibility for being free, among other things, at the expense of controlled mainstream media in the last general election.

When the press are controlled, the nagging question is why is it so? Is the state hiding something? This suspicion only attracts criticism and sows distrust against the state. But states like China and Malaysia could comfortably shove the question asides with clear conscience if free press is practiced.

Categories
Sports

[1619] Of Ajax are hailing

The Eredivisie is not over yet. As Twente forced a draw upon PSV, Ajax continue to make up what it has lost along the way. Ajax scored a victory against Groningen.

AMSTERDAM, April 16 (Reuters) – PSV Eindhoven were kept waiting for the Dutch league title after second-placed Ajax Amsterdam won 2-1 at Groningen on Wednesday.

PSV are top with 69 points and visit Vitesse Arnhem in the final game of the season on Sunday. Ajax, who are three points adrift, host Heracles Almelo on the last day. [PSV made to wait after Ajax claim victory. ESPNsoccernet. April 16 2008]

While this is good news, admittedly, the crown of the league is PSV to lose and I do not believe PSV would lose on that day, unless a miraculous disaster hit PSV. With only a game left and 3 points separating the two teams, the only way Ajax could win the Eredivisie is for PSV to lose to Vitesse Arnhem and Ajax to win against Heracles. That would cause both to have 69 points but due to superior goal difference, Ajax would come up on top.

Ajax on top… Now, that would be a real wet dream.

Hup Ajax Hup!

And finally, unfortunately, my favorite Ajax fan page, AjaxUSA has called it a quit.

We almost can’t believe we’re announcing this, but we are.

We’re calling it quits. Ajax USA is saying farewel. [Obituary for a fansite: AJAX USA (1995-2008). Accessed April 17 2008]

I would like to say thank you from the bottom of my heart for all the updates. Updates from AjaxUSA was one of those little things that helped me wade dthrough many of those lonely nights in Ann Arbor. It made my life a little bit easier to swallow. Life would have been different without Menno.

Because of that, AjaxUSA, you have my deepest gratitude.

And yes, always Ajax.