One should consider how futures prices impact this economics model.
This factory could afford to upscale because they could sell their product for a much higher price, and pay their workers much more to do so.
However if they had already sold the factories output for the regular price via a futures contract (ie. 1 ton of polypropylene for delivery in June for $2000), then the story would be different.
Futures contracts are widely used as a way to take the risk out of doing things, but the side effect is your economy loses all incentive to be flexible to changing needs.
If demand increases for PPE (e.g. a righward shift of the demand curve) because of a pandemic, then prices increase but quantity demanded increases as well.
They may have existing futures contracts at the prior price and quantity but if quantity demanded has increased, then that means there are new orders as well that would be at the new, higher, market price.
The article is about them increasing their output. They could have sold the factories previous expected output via a futures contract. That doesn't stop them increasing output and selling in excess of any futures contracts.
Polypropylene is great: it revolutionized residential plumbing, at least in countries that adopted it (apparently not the US). With PP tubes you can weld any complex plumbing with like $50 worth of tools and minimum skills. The only drawback is significant thermal expansion, but they’re flexible enough that they won’t break even if you forget to design around that.
Not sure what the other comment is referring to, but you’re right that PEX is much more flexible than PP. It’s commonly used in the US for residential plumbing, and is easier and quicker to install than PP, which is a big reason PP hasn’t replaced it (in the US).
If the water main was installed in recent decades it might well be PVC so having copper instead of polythene in your house won't make a meaningful difference.
> If the workers had been expected to do this for normal wages, this wouldn't have happened.
I know some people really believe that people are only motivated by monetary incentives, but this isn't the reality of mankind. People do make sacrifice without monetary compensation all the time. (And many, many, did during covid)
Unlike what microeconomics-obsessed people think, workers don't make sophistivated economic calculations, instead they mostly care about being treated fairly.
And I glad people aren't like how microeconomics model them, because the world simply wouldn't work otherwise.
True. The other side of 'fair' in this situation is what was the company earning.
Busting a gut to make some shareholders/managers loads of money isn't exactly fair if you aren't also being rewarded.
On the other hand, in the UK the NHS has traditionally paid people extra on the understanding that these things happen. But when it did happen the staff were asking for even more.
I know this probably comes across as right wing, but my point is how we reward people for black swan events.
> Busting a gut to make some shareholders/managers loads of money isn't exactly fair if you aren't also being rewarded.
Exactly. But it's not a matter of “being paid more than the marginal value of the additional work” as microeconomics tend to frame those things.
Symmetrically, people routinely accept pay cut or degraded work conditions when the company isn't going well, even though it makes no sense from a game theory perspective (it's basically a prisoners' dilemma yet people cooperate most of the time).
Great article but it should have included some remarks about how unnecessary, fruitless and a waste of time and resources it all was.
Are people on average still not able to accept the whole thing was idiotic from start to finish? The very idea masking ever helped a single person avoid getting covid is just stilly at this point, right? Otherwise we'd still be doing it or at least getting the vaccine, I don't know anyone that's gotten it the last 3 years.
Article would have been better from the angle of, "look at all the stupid stuff people were doing, ha" not, "these people were HEROES!" At best they were misled, at worst, profiteer idiots.
That is a bold claim contrary to the consensus of evidence I could find. From what I've read, masks were generally effective at reducing the spread of COVID, found mostly through observational studies, but backed by some random trials as well.
You should either cite evidence or amend your claim.
I think the main point was to flatten the curve, as hospitals were overloaded.
Masks (at least the better ones) did reduce the likelihood of getting covid, and people didn't have the antibodies they have now.
And if you lived in a state that published open data you could see this happen — hospitalization rate goes up and bed count goes down, and we’d go to tighter restrictions until the trend reversed and the bed count went back up. A lot of the public health response wasn’t about stopping COVID transmission, it was about limiting the effect on a hospital’s ability to provide care for things like life-threatening injuries.
Viruses get less dangerous over time. Hospitals absolutely were overwhelmed back then, and anything to reduce spread helped.
Virus spread follows exponential/logistic growth. Something could reduce spread 5% per month and that would still have an extremely big impact in a pandemic that lasted years. It's not necessary for any of the precautions to have been remotely close to 100% effective to argue they were helpful and important.
This seems extremely reductionist in a reckless manner.
You're taking some partial truths (sure, some responses were overblown, though some were frustratingly half-measures too) and making an enormous logical leap that the entire response was "idiotic from start to finish".
You can't assume that because we eventually ended certain interventions, they never did anything at all. You're retrojecting.
Elderly in Sweden got hurt really badly while the very youngest didn't have the education losses seen elsewhere.
However, Swedes, unlike dumbass Americans, took sensible precautions even though there weren't required by law.
> Swedes were not forced to take action against the spread of the virus, but they did so anyway. This voluntary approach might not have worked everywhere, but Sweden has a history of high trust in authorities, and people tend to comply with public health recommendations.
> In its final report on the pandemic response, the Corona Commission concluded that tougher measures should have been taken early in the pandemic, such as quarantine for those returning from high-risk areas and a temporary ban on entry to Sweden.
That's the nuance missing from the parent's snark, masks are most effective at preventing the wearer from transmitting infections to the people around them (especially important in an operating theater). Masks may also help prevent the wearer from inhaling airborne pathogens, though they're less effective there.
Also missing from the discussion is that it is easy to prove that an N95 mask works because the effect is so dramatic.
The fact that the efficacy of a surgical mask is more difficult to prove does not mean that it doesn't work. And, as you point out, the major benefit is to the people around you so that you don't unintentionally spread the disease before you realize you have it.
> The company would compensate them well: full wages for the whole time, even when sleeping, and a paid week off after.
Only a week??? I mean, we are all going to be replaced with AI any day now, but were it not the case, I'm fully expecting to see an American company to offer, as a benefit, "we will collect and bring your remains to the workplace if you by accident die outside."
One should consider how futures prices impact this economics model.
This factory could afford to upscale because they could sell their product for a much higher price, and pay their workers much more to do so.
However if they had already sold the factories output for the regular price via a futures contract (ie. 1 ton of polypropylene for delivery in June for $2000), then the story would be different.
Futures contracts are widely used as a way to take the risk out of doing things, but the side effect is your economy loses all incentive to be flexible to changing needs.
If demand increases for PPE (e.g. a righward shift of the demand curve) because of a pandemic, then prices increase but quantity demanded increases as well.
They may have existing futures contracts at the prior price and quantity but if quantity demanded has increased, then that means there are new orders as well that would be at the new, higher, market price.
The article is about them increasing their output. They could have sold the factories previous expected output via a futures contract. That doesn't stop them increasing output and selling in excess of any futures contracts.
Polypropylene is great: it revolutionized residential plumbing, at least in countries that adopted it (apparently not the US). With PP tubes you can weld any complex plumbing with like $50 worth of tools and minimum skills. The only drawback is significant thermal expansion, but they’re flexible enough that they won’t break even if you forget to design around that.
Isn’t that cross-linked polyethylene (PEX), not PP?
No, PEX is different. PEX is flexible, sometimes more convenient but requires more specialized and expensive tools to install properly.
You can install pex with just a crimping tool that runs around that price.
Not sure what the other comment is referring to, but you’re right that PEX is much more flexible than PP. It’s commonly used in the US for residential plumbing, and is easier and quicker to install than PP, which is a big reason PP hasn’t replaced it (in the US).
Rechecked now, PEX became way more accessible it seems. Rehau-style toolkits used to cost several hundreds.
I prefer copper and not having micro plastics in my water.
If the water main was installed in recent decades it might well be PVC so having copper instead of polythene in your house won't make a meaningful difference.
> If the workers had been expected to do this for normal wages, this wouldn't have happened.
I know some people really believe that people are only motivated by monetary incentives, but this isn't the reality of mankind. People do make sacrifice without monetary compensation all the time. (And many, many, did during covid)
Unlike what microeconomics-obsessed people think, workers don't make sophistivated economic calculations, instead they mostly care about being treated fairly.
And I glad people aren't like how microeconomics model them, because the world simply wouldn't work otherwise.
True. The other side of 'fair' in this situation is what was the company earning.
Busting a gut to make some shareholders/managers loads of money isn't exactly fair if you aren't also being rewarded.
On the other hand, in the UK the NHS has traditionally paid people extra on the understanding that these things happen. But when it did happen the staff were asking for even more. I know this probably comes across as right wing, but my point is how we reward people for black swan events.
> Busting a gut to make some shareholders/managers loads of money isn't exactly fair if you aren't also being rewarded.
Exactly. But it's not a matter of “being paid more than the marginal value of the additional work” as microeconomics tend to frame those things.
Symmetrically, people routinely accept pay cut or degraded work conditions when the company isn't going well, even though it makes no sense from a game theory perspective (it's basically a prisoners' dilemma yet people cooperate most of the time).
There's a story of the US war machine making a bunker buster bomb back during the first Gulf war doing something similar...
https://www.ausairpower.net/GBU-28.html
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Knowing what you knew at that specific time, you did the right thing with your donation. Kudos.
Great article but it should have included some remarks about how unnecessary, fruitless and a waste of time and resources it all was.
Are people on average still not able to accept the whole thing was idiotic from start to finish? The very idea masking ever helped a single person avoid getting covid is just stilly at this point, right? Otherwise we'd still be doing it or at least getting the vaccine, I don't know anyone that's gotten it the last 3 years.
Article would have been better from the angle of, "look at all the stupid stuff people were doing, ha" not, "these people were HEROES!" At best they were misled, at worst, profiteer idiots.
That is a bold claim contrary to the consensus of evidence I could find. From what I've read, masks were generally effective at reducing the spread of COVID, found mostly through observational studies, but backed by some random trials as well.
You should either cite evidence or amend your claim.
I think the main point was to flatten the curve, as hospitals were overloaded. Masks (at least the better ones) did reduce the likelihood of getting covid, and people didn't have the antibodies they have now.
And if you lived in a state that published open data you could see this happen — hospitalization rate goes up and bed count goes down, and we’d go to tighter restrictions until the trend reversed and the bed count went back up. A lot of the public health response wasn’t about stopping COVID transmission, it was about limiting the effect on a hospital’s ability to provide care for things like life-threatening injuries.
Viruses get less dangerous over time. Hospitals absolutely were overwhelmed back then, and anything to reduce spread helped.
Virus spread follows exponential/logistic growth. Something could reduce spread 5% per month and that would still have an extremely big impact in a pandemic that lasted years. It's not necessary for any of the precautions to have been remotely close to 100% effective to argue they were helpful and important.
This seems extremely reductionist in a reckless manner.
You're taking some partial truths (sure, some responses were overblown, though some were frustratingly half-measures too) and making an enormous logical leap that the entire response was "idiotic from start to finish".
You can't assume that because we eventually ended certain interventions, they never did anything at all. You're retrojecting.
We now know the comparison: https://theconversation.com/did-swedens-controversial-covid-...
Elderly in Sweden got hurt really badly while the very youngest didn't have the education losses seen elsewhere.
However, Swedes, unlike dumbass Americans, took sensible precautions even though there weren't required by law.
> Swedes were not forced to take action against the spread of the virus, but they did so anyway. This voluntary approach might not have worked everywhere, but Sweden has a history of high trust in authorities, and people tend to comply with public health recommendations.
> In its final report on the pandemic response, the Corona Commission concluded that tougher measures should have been taken early in the pandemic, such as quarantine for those returning from high-risk areas and a temporary ban on entry to Sweden.
Once you get the vaccine you generally only need a few boosters and you're done.
I haven't gotten a diphtheria vax since I was a child. What a waste of time!
If masks don't do anything why do surgeons wear them?
That's the nuance missing from the parent's snark, masks are most effective at preventing the wearer from transmitting infections to the people around them (especially important in an operating theater). Masks may also help prevent the wearer from inhaling airborne pathogens, though they're less effective there.
Also missing from the discussion is that it is easy to prove that an N95 mask works because the effect is so dramatic.
The fact that the efficacy of a surgical mask is more difficult to prove does not mean that it doesn't work. And, as you point out, the major benefit is to the people around you so that you don't unintentionally spread the disease before you realize you have it.
> The company would compensate them well: full wages for the whole time, even when sleeping, and a paid week off after.
Only a week??? I mean, we are all going to be replaced with AI any day now, but were it not the case, I'm fully expecting to see an American company to offer, as a benefit, "we will collect and bring your remains to the workplace if you by accident die outside."
I understood that to mean they were paid on their week off. They would then return to the factory.