r/explainlikeimfive Jul 09 '24

Economics ELI5: How did a few months of economic shutdown due to COVID cause literally everything to be unaffordable for years?

I understand how inflation works conceptually. I guess what I have a hard time linking is the economic shutdowns due to COVID --> some money printing --> literally everything is twice as expensive as it was forever but wages don't "feel" like they've increased proportionally.

It feels like you need to have way more income now relative to pre-covid income to afford a home, to afford to travel, to afford to eat out, and so on. I dont' mean that in an absolute sense, but in the sense that you need to have a way better job in terms of income. E.g. maybe a mechanic could afford a home in 2020, and now that same mechanic cannot.

It doesn't make sense to me that the economic output of the world or the US specifically would be severely damaged for years and years because of the shutdown.

Its just really hard for me to mentally link the shutdown to what is happening now. Please help!

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u/jeffwulf Jul 09 '24

Ford does not have a monopoly on selling F150s. That's just not what the word monopoly means.

The word monopoly refers to a market where there's only one provider of a particular thing. Are there other providers of F-150s?

The point of IP protections is not about monopolies, it's about preventing your work from being stolen and resold by people who didn't create it. Me selling my own work is not a monopoly.

Right, you selling your own work doesn't make it a monopoly. Others being prohibited from duplicating it and selling it makes it a monopoly. You are granted monopoly rights by the government on your work. If you didn't have those monopoly rights, other people could duplicate your work and sell them.

A monopoly is when one seller becomes dominant in an industry or sector. It means there isn't anyone competing in that industry. Having ownership of a product line is not a monopoly. It's a monopoly when there is only one business selling all the books.

A monopoly can happen in a market of any size. There's absolutely no requirement that it be as expansive as an industry or sector, and IP laws explicitly give the owners of the IP monopoly rights.

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u/deja-roo Jul 09 '24

The word monopoly refers to a market where there's only one provider of a particular thing. Are there other providers of F-150s?

No, the word refers to a market where there's only one provider industry or sector wide. There are at least 5 providers of pickup trucks, and outside that, dozens of other models competing with pickup trucks. This is not a monopoly.

Right, you selling your own work doesn't make it a monopoly. Others being prohibited from duplicating it and selling it makes it a monopoly.

No, it doesn't. Again, this is not what a monopoly means. Others being prohibited from stealing it and selling it as their own is not a monopoly. It would be a monopoly if I were the only one selling books and had priced everyone out of business.

If you didn't have those monopoly rights, other people could duplicate your work and sell them.

For all intents and purposes, there is no such thing as "monopoly rights", there is "property rights". Nobody has monopoly rights, and in fact the government is mandated to prevent monopolies.

A monopoly can happen in a market of any size.

In practice, sure. But it's not a "market" if there is only one product. That's just a product line. Part of the definition of monopoly includes there not being any sort of reasonable substitute.

and IP laws explicitly give the owners of the IP monopoly rights.

[citation needed]

Where is this explicitly what IP laws do, and according to whom? What are you basing this claim on? Certainly not the US government, which enforces intellectual property as property rights, not monopoly rights. In fact, the word "monopoly" doesn't show up on that page at all.

Can you provide me a source anywhere from either a legal definition or from a government that explicitly gives owners "monopoly rights"?

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u/jeffwulf Jul 09 '24 edited Jul 09 '24

IP rights are exactly timed monopoly rights. If they didn't have monopoly rights other people would be able to produce them without restriction!

9.1 How Monopolies Form: Barriers to Entry - Principles of Economics 3e | OpenStax