Sunday, August 08, 2010

Discussion starter

Every Econ 101 course includes discussions of rationing via price vs. the alternatives. But prices ration on the demand side while also sending valuable signals to the supply side. Take away prices and you lose both, and that's what made Soviet lines so awful.

A very nice background discussion of queuing appears in today's NY Times, "Getting in (and Out) of Line". The author alludes to all three options: prices, orderly lines or messy scrums (misunderstandings, conflicts and more than occasional ugliness). But he manages to avoid the fact that the best is the enemy of the good and ends this way:
In a way, the market’s spread is a return to another kind of scrum, one in which financial, and not physical, might means right. Perhaps one day lines will be remembered as antique, a quaint system in which things were granted simply for having shown up early, an interlude of relative equality between the scrums that reigned before and after.