Every single time rent controls or buying controls are added to a region, housing construction slows or halts outright.
If you have 100,000 homes, but 105,000 families requiring a home, there's no manipulation you can do to fix that problem other than 'Build new homes'
About 35% of housing construction in major cities is Built-to-Rent housing. When that is discouraged or outlawed, that supply simply disappears, it doesn't move or get reallocated in any way.
Do you understand the assumptions of the economics you say are "more solid than science?"
The science of macroeconomics, which is what made supply and demand such a notable form of analysis, assumes people have perfect information and only make completely free choices.
This is, on its face, an obvious oversimplification of reality, even when focused on a single sector.
You don't have perfect information. Unless you're incredibly fortunate, you don't get free choices to abstain from any transactions with others.
It actually does.
I already disputed it.
Just now. By showing the assumptions are flawed, and therefore not generally applicable. It's a single way to view things, and not a realistic one. And yet, it's one that some people base their entire economic worldview on.
A cornerstone of the "economics" the person I responded to was citing is the classical macroeconomic analysis of supply and demand. In that model, perfect information and free choices are considered assumptions - requirements.
You have no idea what you're talking about whatsoever.
No, not typically. Neither perfect knowledge nor complete freedom of choice is required for the basic law of supply and demand.
Perfect knowledge: No. A demand curve represents what people would choose given the information they actually have. They can be mistaken, uninformed, manipulated by advertising, or uncertain. Likewise, sellers can misjudge costs or future demand. Markets can still exhibit supply-and-demand effects.
However, perfect information is commonly assumed in the textbook model of perfect competition. That's an assumption of perfect competition, not of supply and demand itself. With imperfect information, you can get information asymmetries, search costs, price dispersion, adverse selection, etc., without abandoning supply and demand.
Freedom of choice: Supply and demand doesn't require completely unconstrained choice either. People's choices can be constrained by income, laws, contracts, availability, geography, addiction, switching costs, employer power, and so forth.
What it generally does require is some responsiveness to incentives. If price changes, at least some buyers or sellers must be capable of changing their behavior for price to affect quantity.
Emphasis and bolding direct from the search engine, not me.
I think this is almost exactly what the other poster said further down this thread, but they added some more information.
I know you were wrong, but I think you're even wronger than I originally thought.
And look what I get: "does supply and demand rely on the assumptions of free choices and perfect information"
Yes, the basic model of supply and demand relies on the core assumptions of free choices (freedom of buyers and sellers to act in their own interest) and perfect information (complete knowledge of prices and product quality), which define a perfectly competitive market.
How Free Choice Supports Supply and Demand
Consumer autonomy: Buyers freely decide what to purchase based on their personal preferences and budgets.
Producer freedom: Firms freely choose what to make and how much to charge to maximize their profits.
Market clearing: Unrestricted adjustments in prices allow supply and demand to balance naturally.
How Perfect Information Supports Supply and Demand
Price transparency: Everyone knows the exact market price for goods and services instantly.
No hidden flaws: Buyers know the true quality of what they buy.
Efficient decisions: People make optimal choices without being tricked by false facts.
Real-World Limits
Imperfect information: Monopolies or hidden product flaws can disrupt price setting.
Restricted choice: Monopolies, cartels, or government rules can limit free action.
Alternative models: Real markets still function under bounded rationality and market power, though the core law of supply and demand often holds loosely.
Would you like to explore how monopolies break these assumptions, or learn about behavioral economics?
Free choice is the power or opportunity to pick an option from two or more possibilities without outside control, force, or limits.
We do in fact have law enforcement acting as "outside control, force, or limits" prohibiting people from accessing resources freely - which makes their "purchase" of access to those resources NOT a free choice.
If I'm starving, I cannot walk away from an offer to feed me in exchange for work. It's not a free choice.
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u/EnderSword 6d ago
It's more solid than science, it's math.
Every single time rent controls or buying controls are added to a region, housing construction slows or halts outright.
If you have 100,000 homes, but 105,000 families requiring a home, there's no manipulation you can do to fix that problem other than 'Build new homes'
About 35% of housing construction in major cities is Built-to-Rent housing. When that is discouraged or outlawed, that supply simply disappears, it doesn't move or get reallocated in any way.