Inventories are expensive.
One of those most basic costs is the plain fact of inventory expense. If we want to encourage businesses to keep more supplies than the everyday non-emergency demand would dictate, then we would need to be able to pay for those inventories with higher margins during emergency situations. In that case, those higher margins would not at all represent extraordinary profits. They can represent the previous cost of those large inventories, kept during times when those larger inventories are extremely unprofitable.
High margins do not necessarily mean high profits.
If we look at the margin by itself, and dictate without further knowledge that it is “windfall/obscene/massive”, then we’re just speaking from pure ignorance. High margins don’t automatically imply massive profits, not when those margins are compensating other costs that aren’t included in the most direct reading of the margin during non-emergency times. There is cost in keeping large inventories. There is risk in keeping inventories when you don’t know in advance whether those inventories are a prudent investment.
There is cost in transporting goods during difficult situations.
Transportation costs skyrocket during emergencies. Even if we assume that all the evil local retailers can’t match our own virtuous perfection, it’s still the case that refilling the shelves during emergencies is going to be much more expensive than refilling shelves during normal times, and that cash flow requirements are going to be much different given this additional expense. Managing cash flow is yet another cost that hasn’t seemed to receive much consideration. Businesses need to find some way to refill their inventories, and it is easier for them to do that if they’re charging higher prices for their expensive inventories. This extra cash flow can help with re-supply given non-ideal, and extremely expensive, transportation circumstances.
It is ultimately an empirical question of whether higher prices bring more goods to afflicted regions.
In economic terms, the question is the “elasticity” of the supply curve during emergency times. Whether or not supply is perfectly inelastic is an empirical question, and cannot be solved by people asserting their own moral superiority without the benefit of any additional thought. We actually have to look at the way the world works to know the answer to this question. I’m far from an expert on emergency economics, so I’m not going to state ex cathedra how reality works here – I simply don’t know – but if supply is sufficiently responsive to price in these cases, then by allowing prices to raise, then we increase the amount of food, water, gasoline, basic medical supplies, and other needful items. That would mean more people get what they need, when they need it.
And there are at least some reasons to think that supply is not perfectly inelastic even during emergencies. Inventories can be prepared in advance, if it’s not too costly to do so. Even more than that, disaster zones aren’t on the moon. They aren’t disconnected totally from the rest of the world. It’s more costly to transport items, yes, but it’s exactly in that very case where we should expect prices to rise in order for people to be able to cover that cost. It tends to be rare to see perfectly inelastic supply in other contexts, which might give us a hint about this context. Demand slopes down. Supply slopes up. That’s simple, but one of the reasons the idea is so powerful is that it tends to be right so very often. Everything is more costly during emergencies, and that has to be paid for.
Using emotionally charged terminology language doesn’t help us think clearly about reality.
I’m far from perfectly certain whether supply is sufficiently elastic to justify higher prices in this case, but if it is, then those higher prices are going to get needed supplies to more people, more quickly, at genuinely the lowest cost available given the alternatives. That might not be the case. In certain situations, rationing might be a better plan. (I might suggest hotel rooms here, whose supply can’t be readily expanded on short notice. Maybe Airbnb has changed that situation, tho.)
The ultimate point is that we want to get supplies where those supplies are needed. It’s a topic that’s worth careful consideration, but when people throw around morally loaded terms, it means they’re already decided what to believe before they’ve even thought about it. “Gouging” is an emotionally charged word. If those high prices are paying for previous inventories, or paying to keep transportation routes functioning, then that’s hardly a story of exploitation. Rather, it’s a story that things are harder to produce during emergencies. Obviously a lot of shitty behavior can happen during a crisis, but a change in prices is not necessarily an example of that. Higher prices might simply reflect the reality of higher costs of supply.