Economics: The Value of "Price Gouging"

[Speaker to Animals]

For real. Have a great time selling insulin for thousands of dollars per pop after a hurricane. If the Army doesn't arrest you before somebody kills you, I am sure the commanding general of the relief effort is going to shed a small tear on your behalf. We might even publish an obit for you a week later.

[Martin Hash]

Yes.

[DBTrek]

There's the self righteous anger I was looking for. Ok, before further outlining how an economy dictated by price point (rather than bureaucracy) will guarantee the most efficient use of limited resources let's take a moment to look at what interfering with "price gougers" achieves.

Suppose MH and StA pass laws in advance of the hurricane regarding water and/or insulin. The laws are simple, you can't mark up any items in the wake of the disaster. Everything must sell for the price it normally would. Now what happens?

Well....

• 1. People from the surrounding areas will have little reason to rush badly needed supplies into the disaster area so they can to lose money for their efforts.
  
  2. Businesses in the surrounding area, which might have paid extra shipping charges, overtime to employees, and greater storage fees to stockpile items that would be needed in the wake of the disaster will not. They're not in business to take a loss on items either.
  
  3. The distribution of resources (water, insulin, etc) goes from many hands (as people self-regulate due to higher prices) to few hands (whoever gets to the items first).

Now, instead of a bunch of early suppliers rushing critical goods to desperate people, we just have desperate people waiting on the government to eventually reach their area and set up the FEMA tents. This government, by the way. They're going to be the sole option for the desperate folks. A government with zero incentive to move one iota faster.

You see, "price gougers" aren't actually gouging at all. They're being compensated for driving all night to bring desperate people some of the goods they need at a time when no one else will. So when folks get angry and start talking about freezing prices and prosecuting "price gougers" what they're actually doing is depriving desperate people of advanced responders. They're also shifting the distribution of goods from wide-spread self regulation to "whomever gets there first". It's a worse outcome all around - as is usually the case when we let emotions drive our decisions.

[nmoore63]

I probably don’t even need to express my thoughts in this, but...

In general, price gouging allows for more of the scarce resource to be acquired and decreasing the shortage.

Luckily, we have the Venezuela government to step in and shutdown those price gouging bakers so more people can starve.

[Martin Hash]

Price Gougers, all Libertarians really, simply assume the benefits of the State, and exclaim loudly against "VIOLENCE" because they know that's the weakness in their argument. Listen all you Libertarians, without State Violence you mutterfukkers would be the first to go.

[Martin Hash]

"Everybody has a plan 'til they get punched in the mouth." - Mike Tyson to Libertarians

[Fife]

But, DB, the Army has guns and stuff. StA said so.

The hatred of commerce, and (gasp) a profit motive to motivate the distribution of desperately needed goods to the people most in need as quickly as possible, blinds otherwise educated people.

The next step is to outlaw the Walmart from even giving shit away to improve their brand.

Just wait for the FEMA van, I guess.

[Fife]

Price Gougers, all Libertarians really, simply assume the benefits of the State, and exclaim loudly against "VIOLENCE" because they know that's the weakness in their argument. Listen all you Libertarians, without State Violence you mutterfukkers would be the first to go.

Nick is right, Martin, and so are you. No "price gougers" in Venezuela! :goteam: :drunk:

[Martin Hash]

Price Gougers, all Libertarians really, simply assume the benefits of the State, and exclaim loudly against "VIOLENCE" because they know that's the weakness in their argument. Listen all you Libertarians, without State Violence you mutterfukkers would be the first to go.

Nick is right, Martin, and so are you. No "price gougers" in Venezuela! :goteam: :drunk:

Dude, they leave Venezuela or get killed.

Do you think the people of Venezuela are being held under the jackboot of government, is that what you think? You think the average Venezuelan would become a Capitalist if not for the State? Venezuela is Collectivist because The People got fucking sick-n-tired of Libertarians, and kicked their ass out.

[Haumana]

"Everybody has a plan 'til they get punched in the mouth." - Mike Tyson to Libertarians

I thought the quote was "punched in the face."