Re: [sig-policy] [Sig-policy] prop-062-v001: Use of final /8
And the problem is that in attempting to introduce a new distribution
system that performs some form of rationing we need to look at the
effects of rationing. Rationing tends to be a highly ineffectual
distribution system - the goods remain 'cheap' but they are scarce.
Rationing encourages hoarding as a natural reaction from the consumer.
Rationing tends to encourage secondary markets where the same goods
are priced according to their scarcity value. Because of the effects
of hoarding, the secondary markets tend to operate at a level
of scarcity premium far in excess of the actual relative scarcity level.
Another approach is to perform discriminatory distribution, where
the goods are available only on a selective basis to certain parties
who qualify, and not to others. In this case the issue is that those
with the greatest need, expressable as 'ability to pay' may not
be the same as those who receive the goods. Two problems are overtly
apparent with such a system. By selectively meeting the needs of some
consumers and not others you are making social policies - or in
this context you are making industry policies. I have my doubts that
this group is the appropriate group to determine such policies
and implement them through address distribution practices - conventionally
this is undertaken at a national level through legislatures and implemented
through regulation. Secondly the practice tends to encourage secondary
markets where the same goods are priced according to their scarcity
value, and again the secondary markets operate at a distorted
price level for much the same reasons as the rationing scheme.
Perhaps the issue here is one of illustrating that no matter
how we attempt to impose rationing or selective distribution
of this "final /8" as proposed in prop-055 we encounter these issues.
There is an argument drawn from economic theory that no
form of rationing or discriminatory distribution is efficient
in terms of the outcomes of such a distribution function. This
leads to the corollary that while reserving this last /8 in
prop-055 feels emotionally like a good thing to do in order
to provide some form of "safeguard" against some unspecified
future event, the problem is that we really are finding it
difficult to augment this emotional thought with a rational
and sensible means of actually using this resource effectively
that avoids the outcomes referred to above.
regards,
Geoff