And you thought $99 bottles of water was a bad thing. Silly rabbit, empathy is for nanny states. Let the Free Market Fairy wave her wand of supply-and-demand, and everything will be aaaall peachy. :mad:
This shining example of economic sociopathy comes from Forbes blogger Tim Worstall, who wrote an article called “Hurricane Harvey Is When We Need Price Gouging, Not Laws Against It.” It’s since been pulled down, but you can read the cached pages here (pg1) and here (pg2). If you can’t afford food and water? Sucks to be you, I guess.
Price gouging doesn’t happen in a free market. You can’t charge somebody $99 for water if they’re able to go to another store. Price gouging happens when the free market breaks down and one entity holds a temporary monopoly of some vital resource that people have to have. That’s what creates the conditions for price gouging. You can set whatever price you want because people have no alternative.
Once the normal rules of supply and demand are restored, the free market reasserts itself and prices drop back to rational levels.
People don’t tolerate businesses taking advantage of human misery to make windfall profits.
Good to see this hotel caught in the act (Best Western has dropped them from the chain, and they were forced to refund money to the people they’d gouged).
One positive about social media - it helps spotlight these sleazebags quickly.
Why in the world do you think you’re attacking someone who believes in the magical hand? He’s literally pointing out how the hand DOESN’T work in all situations. He’s denying the free market interpretation that price gouging is a good thing.
That concept ignores the fact that people do not have equal income, and thus driving up the price can make people who need it unable to actually buy it at all. The artificial restriction of supply by outside means prices go up much higher than necessary. And the ones who can actually afford it are those for whom the money is not as big a deal, and thus are in less need.
In an ideal society, the market works. In normal society, with proper restrictions, it works reasonably well. In a disaster, it stops working.
How is pointing this out worthy of derisive laughter?
It seemed like a too pat explanation that needed teasing. I just got done reading Griftopia by Matt Taibbi. Read that and The Shock Doctrine y Naomi Klein, and tell me that markets work. They work for you? Congratulations. They’re supposed to work for everyone. I love markets, but they are not pure. They don’t come back as soon as your crisis goes away. It’s all grey areas and that comment ignored that. They are opportunities for the powerful to exploit.
The point of this thread, as I read the OP, is to point up the absurdity of “market” solutions. Voila.
You won’t be able to buy it for $15 if you couldn’t buy it at $3. That’s the fucking point. The people who can afford $15 will get it. At least if you keep prices low, some of the people who actually need it (i.e., those who can’t afford $15) will get it.
And, anyways, even if you were right, of course it is better to do the right thing and go without than to do the wrong thing and get what you want. That’s kinda ethics 101: sometimes you have to go without because it’s better for everyone.
What is virtuous is what is good for everyone. And anyone can tell that increasing prices to make more money off a tragedy is wrong. Making where those who need it most can’t afford it is clearly not good for anyone. It just guarantees poor people do without.
In the event of a disaster, you have to be giving out what is needed, not relying on the free market when the market is currently down.
Lower prices encourages hoarding so net/net fewer people end up with what they need. Keeping prices artificially low without a rationing plan is a recipe for disaster.
Anyway, I don’t know why anyone would think it’s a market failure if people don’t get what they need-- the free market is not designed to make sure everyone gets what they need. That’s what we have governments for.
If you think this is a joke, I suggest you go learn some economics.
Let me get you started. The free market isn’t a universal condition. There are places where free markets exist and places where free markets don’t exist. Trying to live by free market rules in a place where the free market doesn’t exist is a bad idea.
If you summarily execute a few of these fuckers, the rest will take a lesson. C’mon, Texas! You have a Fast Track judicial system in place. Start with these guys, not poor black folk.
Have you met the American health care system? What about our divorce court system?
As far as price gouging, I’m fairly liberal but I was under the impression that there are some benefits of price gouging.
It prevents a small number of people from monopolizing all the goods that are scarce (of course you could also just have a ‘limit 2’ type policy to prevent this). A small number of people might buy up all the food or water in a survival situation out of fear or to barter.
By jacking up prices, you create incentives for other suppliers to enter the market which means even though it may cost more to bring supplies to the local market, the higher price justifies it. If a water company makes $2 selling water at walmart in bumfuck, Idaho, and also $2 by having it shipped to a disaster area with failed infrastructure, the incentive isn’t there. But if they are charging $5-10 in the disaster area, then the extra time and money necessary to ship it there is justified due to higher cost. Eventually the market reaches equilibrium.
I have 0 economic training, didn’t even take economics in college. So someone explain why these ideas are wrong if they are wrong.
A decade ago I lived in a town that had a severe ice storm. The ice storm meant that power lines all over were knocked down, and as a result people were without electricity for several weeks.
Within a few days multiple companies started selling generators at above market price nearby. The walmart got a ton of generators in to start selling not long after that.
