http://www.thoughtcrimes.org/mt/archives/002764.htmlIn praise of price gouging
John Stossel
Politicians and the media are furious about price increases in the wake of Hurricane Katrina. They want gas stations and water sellers punished.
Consider this scenario: You are thirsty -- worried that your baby is going to become dehydrated. You find a store that's open, and the storeowner thinks it's immoral to take advantage of your distress, so he won't charge you a dime more than he charged last week. But you can't buy water from him. It's sold out.
You continue on your quest, and finally find that dreaded monster, the price gouger. He offers a bottle of water that cost $1 last week at an "outrageous" price -- say $20. You pay it to survive the disaster.
It saved her because people look out for their own interests. Before you got to the water seller, other people did. At $1 a bottle, they stocked up. At $20 a bottle, they bought more cautiously. By charging $20, the price gouger makes sure his water goes to those who really need it.
And if you don't HAVE $20 John, because you had to pay another gouger $20 for four gallons of gas, and another gouger $10 for a sandwich and another gouger $50 for diapers, and another $25 for ten jars of baby food, what then? Do I make use of a $5 dollars tire iron to save my baby?
You also overlook the fact that price gouging causes shortages due to panic buying. As people try to get more goods than they may need before the price goes up further, the supply dwindles and the your justification to raise prices increases.
Might the water have been provided by volunteers? Certainly some people help others out of benevolence. But we can't count on benevolence. As Adam Smith wrote, "It is not from the benevolence of the butcher, the brewer or the baker, that we can expect our dinner, but from their regard to their own interest."
Smith was talking about normal business men in the course of normal business. A disaster is not a normal situation. I am sure he would loathe scumbags like you as much as I do.
Consider the storeowner's perspective: If he's not going to make a big profit, why open up the store at all? Staying in a disaster area is dangerous and means giving up the opportunity to be with family in order to take care of the needs of strangers. Why take the risk?
If every aspect of your interaction with humanity is part of a profit equation, then certainly your thinking makes sense. We have a name for people like you who view life this way, we call them sociopaths. These people do NOTHING that does not benefit them.
Any number of services -- roofing, for example, carpentry, or tree removal -- are in overwhelming demand after a disaster. When the time comes to rebuild New Orleans, it's safe to predict a shortage of local carpenters: The city's own population of carpenters won't be enough.
Now you are comparing apples to oranges. Roofers and carpenters are not needed for survival, except for people who value possessions more than people. Are we projecting here, John?
If this were a totalitarian country, the government might just order a bunch of tradesmen to go to New Orleans. But in a free society, those tradesmen must be persuaded to leave their homes and families, leave their employers and customers, and drive from say, Wisconsin, to take work in New Orleans. If they can't make more money in Louisiana than Wisconsin, why would they make the trip?
Because souless pricks like you run the government and ruined the economy so they have to get work where they can find it?
Some may be motivated by a desire to be heroic, but we can't expect enough heroes to fill the need, week after week; most will travel there for the same reason most Americans go to work: to make money. Any tradesman who treks to a disaster area must get higher pay than he would get in his hometown, or he won't do the trek. Limit him to what his New Orleans colleagues charged before the storm, and even a would-be hero may say, "the heck with it."
John? This is the reason we have government. Their job is to serve the people and deploy the resources. This why we pay taxes. It is also why we need to tax folk like you up the ass. You seem to believe that unless there is a profit in it, there is no reason for you to get involved, thus you are absolved of your responsibilities as a citizen. For some odd reason though, you expect the firemen and police to come when you call and the roads to be paved and the banks to obey laws requiring them not to cheat you.
If he charges enough to justify his venture, he's likely to be condemned morally or legally by the very people he's trying to help. But they just don't understand basic economics. Force prices down, and you keep suppliers out. Let the market work, suppliers come -- and competition brings prices as low as the challenges of the disaster allow. Goods that were in short supply become available, even to the poor.
John? If you are ever on fire, pissing on you will cost $1,000. Cash only. In advance. After all, I have to turn a profit.