Posted on 08/17/2004 3:49:10 PM PDT by beaureguard
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Exactly who did I call names????
I am not arguing the economic theory of W. Williams. I am arguing the morality of price gouging and taking advantage of someone in distress. I point out that super-capitalists (one who believes that capitalism in its purest form is the utopian society) and their adherent theories are amoral. Life to them is based on a computation of gain and loss and nothing else.
Anyway, you obviously haven't listened to walter e williams or read his work. Or maybe you just can't understand it. The underlying notion is NOT money, it is FREEDOM.
Of course I have listened to his stilted way of presenting his viewpoint. It's boring. He cannot talk about anything but economics which is inherently a boring subject.
He wants people to be able to decide that if there's a disaster and they want to sell supplies - and they have to go through the trouble of getting transportation, product, personnel, whatever - that they and the buyer be the sole determination of how much the supplies are sold for.
Once again, I am not arguing economics. I am pointing out the amorality in using capitalism to solve all of society's problems.
Apparently, you want the government to step in and say, no, you can't offer to sell something in high demand for a higher price.
Show me once where I said government should step in. I am actually hoping that Christ would somehow have a say in this matter.
But apparently you'd rather have people dehydrate and die than some person who is motivated by evil 'profit' come in and fill their needs after the $1 a gallon water was sold out.
I forgive you this insult.
"Everyone wants to talk about gouging but none dare discuss hording. The practice people call 'gouging', which in most cases is just the market reacting to an over abundance of demand, is the best defense against hording. It may sound brutal, but it works to combat extremes at both ends of the spectrum."
There is not much change in net demand before and after the crisis.
As an aggregate, the affected people needed the same amount of food, water, and shelter before the disaster as they did after, minus any casualties.
"Gouging" is the result of economic actors reacting to decimation of supply, not increased demand. Supply of water decreases because water plants are offline. Supply of food decreases. Supply of shelter decreases because homes are destroyed or rendered uninhabitable.
The only difference between "gougers" and "hoarders" is what they plan to do with their stockpile of scarce goods - personally consume them, or make a quick buck.
"Which is more 'compassionate' - a person forced to spend the night outside because someone used more rooms than they needed - or a family that paid more for a room and thus enabled another family to stay in the room that's now available?"
What about the family who had nothing left but $50? Is it compassionate that they should spend the night outside because market forces dictate a $100 per night rate to ensure the most even distribution of rooms?
"If you're using up gas at government-set regular prices just to post here while others have to go without for vital needs, then that's something that the people without gas would probably see as worse than any gouging they may encounter."
So, it's not ok for me to use my generator to post here if I'm paying government-set prices, but it would be fine if I paid "market price" for the gas? People who would take issue with me posting here under these circumstances would not care if I paid $1 or $100 per gallon for the gas. The only difference would be the expletive they used when referring to me - "rich ba$stard" instead of just plain old "ba$stard".
Bingo.
Silly economist who can't see the forest for the trees bump!
exactly. There are number of factors that go into the decision whether to make the effor to sell the water.
For the kumbaya crowd, consider the following:
Evil businessman owns a beverage company 500 miles away. He has 2000 gallons of water sitting in his warehouse.
He must take into account:
1. Cost he paid for the water initially.
2. Transportation costs to and from the location of disaster. Also costs while driving around the area.
3. Any costs of lodging overnight.
4. Labor costs of making a trip. If it's just him, he's skipping opportunities at home and has to have employees fill the gap. If it's employees, he likely has to pay overtime.
5. The risk that he could travel 1000 miles, pay his employees extra, and not sell any water, because someone has already filled that need.
Keep in mind mr. evil price-gouging business man likely has a mortgage and other expenses too - he can't afford to just give away something he was planning on selling unless he was doing rather well.
So he determines that he needs to sell the water for $4 a gallon to make a healthy profit. If push comes to shove, he can maybe sell it for $3 a gallon or so and break even.
Now the society of benevolent dictators and government officals get together. They decree that no one may sell water for more than $2 a gallon. Anything more would be gouging and just plain evil.
What does the kumbaya crowd think will happen? Will the businessman who has to meet payroll and pay invoices to suppliers on time drive 1000 miles to lose $1 a gallon on 2000 gallons worth of water? Or does he give them away and tell his creditors he was just doing the brotherly thing (and then lay off an employee or two to make up the loss)???
Or does he do what any sane business man would do- decide it wasn't worth his trouble and he can't afford to spend the time and effort to lose money and hurt his business and his employees?
And who benefits from this grand declaration that protects the innocent from gouging? It's not the suppliers. It's not the consumers who had to go without water because the red cross, phillip morris, and local supplies weren't enough because there was no incentive to fill the need.
The only people who benefit from this are the politicians and the kumbaya crowd who can bask in the glow of their own self righteousness and say "look at all the people we helped by eliminating price gouging" -- all while people are going without water and other things they need.
And that is what they claim for their superiority - their good intentions that can result in more suffering that they cure.
"So, it's not ok for me to use my generator to post here if I'm paying government-set prices, but it would be fine if I paid "market price" for the gas? People who would take issue with me posting here under these circumstances would not care if I paid $1 or $100 per gallon for the gas. The only difference would be the expletive they used when referring to me - "rich ba$stard" instead of just plain old "ba$stard". "
That's a moral question that you need to answer for yourself. The POV of a victim of 'gouging' is similar to that of a victim of 'hoarding' - they are both left without what they need / want because of another's actions. But with 'gouging', at least they have the ability to haggle. Once it's 'horded', they're SOL.
You use the example of a person who only has $50 for a hotel room being out of luck. If instead a hotel room, that person only had 3 gallons of gasoline due to government price controls, but needed 5 to get to a relative's house, they would be just as bad off as if if they were out of a hotel room because of price increases.
But this time, it would be because of government fiat. And by the actions of 'horders'.
Because if they had $50 and gas was $10 a gallon, they could afford enough to get where they had to go. But if gas were artificially rationed due to government limits, or due to 'hording', by say, people who couldn't stay away from free republic or "fear factor" or their PS2 - then they are much worse off than they would be if the free market was allowed to curb demand naturally.
They still can't get what they want or need, but this time, they have no recourse.
So few trust the market - astonishing!
Thanks for your patient efforts.
I've lost patience.
So many here say they want freedom. But when it comes down to it, many of them only want freedom for themselves. They're all for government intervention when it favors their current position.
"that person only had 3 gallons of gasoline due to government price controls, but needed 5 to get to a relative's house"
Or he could have only three gallons of gas because he didn't have enough cash on him when the storm hit to buy five at the "market price". Either way, he's screwed.
"But with 'gouging', at least they have the ability to haggle"
In the "price controlled" scenario, he could do like I did - ask neighbors, call out on the CB radio, and hike all over the county until he found somewhere to buy gas.
Talk about warped logic. The fact is just as many people can and will die by being priced out of the market as will be saved by price gouging. Your argument is not only totally irrational, it is morally inverted as well.
The truly sad part is that their reasoning has aligned them with the average DU poster, and they don't grasp that fact or just don't care.
If you look at my example at the end of post #98, two families have different needs but both could come up with $150 if they needed to. Need in that example is indeed equal to "willingness to pay". The difference in the families is only who has relatives nearby. You could think of that as one extreme, where all people have the same wealth, but different needs. The other extreme is that all have the same basic need, but extremely different ablity to pay. Neither extreme fits the real world. People have different ablity to pay, but there are also poor people with relatives nearby, and rich people with no relatives nearby, thus different needs than those with no relatives nearby.
Let me try an example that incorperates both wealth (your focus) and differing need (my focus).
Say we have 400 hotel rooms at $50, 400 wanted by rich families, half with relatives nearby, and 400 wanted by poor families, half with relatives nearby. That is 400 rooms but 800 demanded.
My solution: $150 price.
Result: Hotel rooms occupied by:
200 Rich with no nearby relatives
25 Rich with nearby relatives (hey, there rich)
175 Poor without nearby realtives
=400 rooms
Others:
175 Rich stay with nearby relatives
200 Poor stay with nearby relatives
25 Poor cannot afford $150, are on the street (or drive farther out)
=400 with no rooms, of which 25 poor are on the street (or have a long drive).
Your solution $50 per night
Hotel rooms first come first serve (say randomly):
200 Rich get hotel rooms, half with nearby relaives
200 Poor get hotel rooms, half with nearby relatives
=400 rooms
100 Rich Stay with nearby relatives
100 Rich on street (or drive farther out)
100 Poor stay with nearby relatives
100 Poor on street (or drive farther out)
=400 witout rooms of which 200 are with relatives and 200 are on street or must drive far.
So rich people can come out better in a disaster in general, and rich people come out worse in your solution. But poor people as a group are also worse off in your soulution, assuming 100 poor families on the street is worse than 25 poor families on the street. Of course, you can tweak the numbers if you like but the point remains. Rich and Poor alike, both groups, are worse off under your solution. Your solution of no price increase results in a lot more hardship. If you are woried about the poor busting thier budget then give them aid after the fact, but please don't put 175 additional poor people on the street in some sort of moral crusade against "greed".
You just made the point I made on another thread (different article same topic).
Censoring Pleas for Help [Government price controls during natural disasters hurt people]
No one is saying don't give away water, and other supplies to the truely poor, or sell on temporary credit (an infomal IOU, or give it free) to those who are not poor but are stuck without means of payment. Those things are Chirstian. I don't see what is so Christian about ignoring the impending shortage, selling at the old low price to the people happen to show up first, and then having nothing left for those who need it most, be they rich or poor.
And I'm here to tell you memories last lots longer than that. I lived in Des Moines during the big flood of 1993, when the entire city was without public water service for close to two weeks. The beer companies, God love 'em, got together and bottled-and-canned up a jillion gallons of drinking water for the inhabitants. For free.
As a young man of 20, I already had great affection for the products of Anheuser-Busch, but they earned my undying love for their actions those couple weeks. : )
SW
I've always thought it was to help preserve order in disaster zones, namely by protecting the safety of those who would gouge.
SW
True, though you should note that the 100 of the poor people who had noplace to go ended up being $100 poorer than they would have been under the $50 scenario; I don't wish to suggest that isn't more than offset by the fact that 75 poor people who needed rooms were able to get them when they otherwise wouldn't, but in fairness that should be noted.
As a general observation, if the market price for a good is $X/unit or less, that means anybody can buy as much as they want for $X/unit [with the caveat that buying too much of a good may cause the market price to increase before the purchase is ocmplete]. Conversely, if someone cannot buy a good for $X/unit, the market price is above $X.
The effect of price controls is to keep prices low until they skyrocket. Allowing prices to fluctuate freely helps avoid worse changes.
[BTW, on a related note, the effect of price floors is to make goods whose market price falls below the floor, worthless].
I operate a small grocery store in Virginia's Northern Neck. When Isabel came through here ... I raised not one price. My ice and water went in a matter of hours.
Suppose that, after you sold all supplies, someone came through with a supply they wanted to sell at a premium price. Would you have bought it so you could then have supplied your customers at a higher price? Should that be legal?
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