What are they going to rob? I can’t raise prices so I didn’t hold extra inventory or arrange for special orders. I didn’t pay for an emergency generator because I can’t recoup that cost. The guy with the truck in San Antonio won’t bring me anything because I can’t pay him enough to make it worth his time.
If they get desperate enough, each other.
There are few people who will let something like a mere lack of money allow them to watch as their family goes without basic necessities.
A few days, an people will be noble, and hold to the social contract. Start getting out past that, and people will be looking out for themselves and their families, others and laws be damned.
Personally, I think it should go best of both worlds. You don’t make a law that says that you may not raise prices in an emergency, but you do put in a subsidy for any stores that do not raise their prices during the emergency get a bonus from the govt.
They may make a bit more by gouging, and your guy with a pickup coming down is under no obligation to charge anything different than he values it.
…but Uber has also famously gotten itself into trouble when it surged during emergencies and disasters: and has voluntarily agreed to limit surge pricing during emergency situations. The PR hit just isn’t worth it.
The idea that price gouging is a good thing is wholly dependent on the following theories:
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That stock mobility can and will increase faster solely as a result of the lure of money.
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That it’s super okay for the poor to just die.
Using supply and demand to set prices inherently relies on the idea that demand and supply will meet in the middle due to the greed of suppliers resulting in an increase in stock, and due to ‘demanders’ dropping out of the market because they’ve been priced out. These are inherent and unavoidable aspects of the model.
I personally don’t believe that store stock like food and water will be restocked faster if gouging is allowed; I believe that the roads will be cleared when the roads are cleared and I believe that the kind of groups that airlift supplies in aren’t doing so on a profit motive. And I’m also critical of the claim that given a fixed supply for a period of time, preferentially supplying rich people and bankrupting/killing poor people is in any way a good thing. So I believe that the supply/demand mechanism of price determinism quite literally doesn’t achieve any desirable goals during the first moments of disaster.
So the only benefit I can see of allowing price gouging is to line the pockets of greedy evil bastards and, of course, to cheer on free market economics without considering too hard whether the model works in the specific situation.
This is not to say that free market pricing serves no purpose in a disaster situation; clearly the government aid efforts should offer higher wages to draw repair and recovery experts after the first blush of disaster has passed. Or put another way, given excessive need they should hire not just the lowest bidder, but the next several not-as-cheap bidders as well. And of course once the disaster has been averted public entities and private individuals can spend as much as they want to hire outside help to come in and rebuild.
But during the first days of emergency, when supplies are not coming in in sufficient quantity and no amount of money will cause more supplies to appear, price gouging is objectively a bad thing. Quotas, though: quotas are great.
Your claim was that trained economists would not make such an assertion. You’re wrong. They would, have, and do. Thanks.
You personally don’t believe something based on a fantasy that access is completely cut off. No airlifts needed. You could be delivering supplies to areas affected by Harvey right now. Why aren’t you?
You’re also focused on people bringing in goods after the fact. As already mentioned, anti-gouging laws discourage pre-disaster actions that increase supply.
Because I’m a computer programmer living nearly two thousand miles away who doesn’t own any such supplies, smart guy. Before the gouged prices rose high enough for me to abandon my job, load up my little Kia, and drive a pitiful amount of supplies there, I would have already come to the conclusion that anybody who would charge disaster victims that kind of price should be shot. And me shooting myself wouldn’t help anybody.
Oddly enough whenever I hear tales of disaster price gouging, I also hear tales of the shelves being emptied instantly anyway. If these ‘encouraged’ pre-disaster actions actually happened and improved supply to any significant degree, you’d think such tales wouldn’t be the norm.
Aren’t the beneficiaries of gouging laws also the middle class, though? It’s not poor people, I don’t think, who race out so they can fill their cars to the brim with gas, load up a bunch of gas cans so they can feed their generators, fill a cart with groceries, etc.
Gotcha. Better for people to suffer and die than someone make a buck from flying to DFW, renting a truck or SUV, and shuttling from a depot or even just making supermarket runs. Nonstop from IDA tomorrow is $650.
Now it may not be worth your while. It’s probably not worth mine. But a grad student at UNT? That’s good beer money and helping people.
Of course it’s not. But this also means that many people won’t get a ride. Uber is going to do what is best for Uber. After all, the drivers are the ones who gain the bulk of the revenue from surge pricing, not the corporation.
The only beneficiaries of anti-gouging laws are hoarders. This is definitely a cut off your nose to spite your face situation. Middle class consumers getting mad at middle class business owners because the supply and demand equation didn’t go their way.
No, the biggest beneficiaries of no gouging laws are the wealthy. And most people feel they don’t need another advantage over everyone else.
Arguing that the first there, shouldn’t get the water, because it’s better if it sits on the shelf until a rich guy with a $50 shows up, is kinda screwed up in my opinion.
There are gouging laws to keep the morally bankrupt from turning every disaster into a Mad Max scenario. Is this really an element that needs to be addded to the sufffering of natural disasters?
The opportunity of making giant profit off the suffering of others really reveals who people are inside. So much for wanting laws that reflect Christian values! Apparently that’s just talk, when it gets in the way of profiteering.
Promoting anti-gouging laws even though they result in worse outcomes and increase suffering is not the moral high ground.
Many people have an irrational sense of fairness such that they will actively seek harm to themselves and others to avoid seeing someone gain (in their opinion) unfairly. This irrational behavior is even more prevalent after certain forms of brain damage (DOI 10.1523/JNEUROSCI.4606-06.2007).
It’s the same concept behind usury laws: better for people to not get credit than to get credit at a higher interest rate than a third party feels is justified.
Yes, that is Christian lawmaking in a sense, but Jesus wasn’t exactly an economist. Morals should trump economics, to be sure, but not in cases where the outcome is bad.
Another precept more ancient than Christianity is “do no harm”. Anti-gouging laws actively harm. The least the government could do is stay out of it. And if they were going to do anti-gouging laws, the next best thing they could do is be fair. Labor should be subject to the same restrictions.
I’m used to democracy being simply a matter of the largest number of people feeling outraged having sway though. I was one of the “vultures” who didn’t own a home pre-housing crash, but swooped in and bought a place for cash from some idiot who paid six times more than I did and got foreclosed on. In the eyes of popular opinion, I’m one of the villains of the housing crash story, whereas the people who took out loans they knew they couldn’t afford were just helpless victims.
But at the Straight Dope, we should really strive to put logic ahead of the emotions of the majority.
A bonus from the government? Really?
The problem with that approach is that sooner or later, you run out of other people’s money to spend.
How much are we going to spend on disaster relief? Are you against that? Do you feel that everyone in Texas that is effected by Harvey should just go about their own business, and the govt should do nothing at all to help out?
If you are philosophically against the federal govt ever stepping in and assisting in disaster areas, then at least you are consistent. If you are for the govt helping out in disasters, then what point are you trying to make here?
If we are going to be spending billions rebuilding the area after this disaster, a small percentage of it can go to make sure that people are not being deprived of necessities because they cannot afford the new emergency costs. In the end, it will cost less to subsidize that case of water than to deal with people suffering from severe dehydration. It will cost far far less to subsidize a few cases of water than to deal with the riots that will ensue when you tell people that they just need to go home to their families and lay down and die.
The problem with your approach is that sooner or later, you run out of people.
I presume you’re claiming that some significant percentage of grad students do this whenever there’s a disaster, then? I presume that it’s reasonable to conclude that in every situation where there’s a disaster that causes a shortage where gouging is allowed the shortage is eliminated virtually instantly by hordes of flocking grad students, and everyone* gets what they need.
- Well, except the people who can’t afford to spend $50 in cash each day on overpriced supplies. They get nothing, in theory. But they can just die, right?
I can only speak to the value of their time versus mine and presumably yours, not whether or not they are irrational and immoral enough to wish death on someone charging a markup for their own time and costs.
Why can’t the government just buy poor people things they need? Why implement price controls? Let the prices fluctuate naturally according to market forces so that the supply is there, and then if poor people in the affected region still can’t obtain necessities, the government can buy it for them. Or better yet, just give them cash, and let the affected people themselves decide what they need without getting bureaucrats involved.
I’m not a fan of government, but price controls are always bad. Spending money to help poor people is a good thing. Spending money to enforce ignorant laws that only hurt poor people is a bad thing. Not sure why anyone would demand the latter instead of the former?
Why demand price controls when they don’t address the problem in the first place, and cause shortages, which just makes the problem worse?