Import tariffs and subsidies are direct market manipulation, and the market doesn't really route around them. Rather, they tend to wreck markets, which is one reason many developing countries continue to press the US and Europe to end farm subsidies - it's wrecking their export markets and hurting their farmers.
Governments, when they want to, are perfectly capable of interfering with markets and even destroying them. I am not a libertarian and do not believe that all intervention is harmful, but disagree with your thesis that markets are able to route around governments. Yes, in some cases, but I think that governments have the upper hand: they have guns and police and stuff, like the libertarians love to say.
I think the "law of unintended consequences" is perhaps more solid ground with regards to governments and market manipulation.
Tarrifs are actually a particularly good example of markets routing around government interference. Routing around tariffs is called smuggling, and has been a huge business as long as there have been governments.
I wasn't claiming, incidentally, that markets were totally immune to government interference-- just as networks are not immune to damage. Just that markets will always find whatever room you give them.
I'd bet that smuggling is a tiny trickle compared to what the market could provide with many commodities (wheat, cotton, corn, stuff like that, not diamonds and rhino horns), meaning that the market is not effectively routing around it at all.
In Colombia, 4.5 kg of coca paste, which will yield about one kilo of cocaine, fetches about $4,500. On the streets of the United States, selling this kilogram of cocaine will earn between $200,000 and $600,000. (http://www.colombiajournal.org/colombia150.htm)
Claritin 10 mg
Consumer Price (100 tablets): $215.17
Cost of general active ingredients: $0.71
(http://www.rense.com/general54/preco.htm)
normalized to 1 kilo ... cost $71,000, value $21517000.00
Your math is off by a few orders of magniture. 100x10mg = 1g, so 1 kg should be 1000x$215.17 = $215,170.00, for an ingredient cost of 1000x$.71 = $710.
Also, I can buy 100 x 10mg Clarityn for $65, but I won't, because I can get 100 x 10mg Mildin (exact same active ingredient) for $35.
Edit: Oops, forgot to add a point.
Your point holds true, your calculations are just for 100 kg instead. Thing is, medicine isn't invented, manufactured sold or bought in a free market. Another difference between Clarityn and coke is that there is a very elaborate framework in place to make sure your pills are good - if your dealer dilutes your coke with flour or ratpoison, you're screwed and nobody cares. If there was no demand/requirement for that protection, I'm sure we could get our pills for around $1.
Ticket scalping also involves equally fun acts & regulations. Luckily the laws are changing (for the better) which is one reason why it was a good idea to invest in us :-D.
Ticketing has been a weird market. There is a strong expectation among consumers that there is a 'fixed price' (face value) and that anything else is 'unfair'. Demand is constrained completely by a venue's capacity leading to all the obvious problems for over-subscribed events.
We deal with this every day. An interesting trend is that we've seen more people buying from ticketmaster (since events are selling out & season ticket sales are down) even when tickets on the secondary market are cheaper and "below face".
It's ridiculous how obsessed people are with face value even when it's arbitrary and doesn't really mean anything; it gives them a sense of fairness.
Also, venues have incentive to sell out as higher margins are associated with concessions, alcohol sales and merchandise. Teams might tell the newspapers they hate the secondary market, but in reality, the majority of them love it. Some even cater to it.
That is incredible. I knew the feeling was strong but to actually influence buyers to pay face value over a discount wasn't what I expected. I guess I was more cynical but the instinct is very strong. It is probably a remnant from when there was no other reasonable option. Why ticket reselling became so vilified I always put down to fan enthusiasm (and therefore irrationality).
This is an important point that the author of the article seems to have not noticed. His whole argument is based on the idea that rent control leads to a decrease in supply, with a resulting hike in price due to unmet demand. But I wonder just how many apartments can really be built in Manhattan? Or in intra-muros Paris, or in the City in London...
Manhattan could have 3x the number of apartments by increasing average building size, granted transportation would become an even larger problem. However, when you increase the cost to live somewhere you decrease the number of people who want to live there so it's probably not a problem.
IMO rent control is best when it limits how much above inflation you can increase rent per year. At 3.5% over inflation you can basically double the real cost over 20 years, but people can plain ahead and know they will not be forced out next year. The major problems seem to occur when rent suddenly goes up 20 percent with little notice or fall significantly below market.
PS: London and Paris are less developed than Manhattan, but they seem to want to maintain their historic look which limits growth. DC has started building down because they can't increase building height which is extremely expensive.
But rent control is probably not the whole story. I'm not familiar with NYC laws but I'm sure there's a lot of regulatory red tape besides rent control that keeps housing scarce and expensive.
Tarifs are indeed an excellent example. Another great example is how too much red tape forces businesses underground in the developing world.
The economist Hernando De Soto http://ild.org.pe/en/home has done studies in many different countries proving this and theorizes that this is one of the main reasons poor countries stay poor.
Governments, when they want to, are perfectly capable of interfering with markets and even destroying them. I am not a libertarian and do not believe that all intervention is harmful, but disagree with your thesis that markets are able to route around governments. Yes, in some cases, but I think that governments have the upper hand: they have guns and police and stuff, like the libertarians love to say.
I think the "law of unintended consequences" is perhaps more solid ground with regards to governments and market manipulation.