Yes. Higher prices encourage conservation and provide incentives to increase supply. They also allocate use to the highest valued users.
I suppose if you think that monetary transactions are the only true measure of moral interaction, then I suppose be makes his case.
However, if one believes there is a moral difference between "can" and "should," (i.e., I "can" charge $25 for a gallon of water, but "should" I?) then I would say that he has not made a case for anything except his own moral obtuseness.
Whether it's immoral or not is beside the point.
Human beings react instinctively against gouging. That's why this author's point, whatever it is, will always fall on deaf ears.
Capitalism is freedom. Anything else is not.
"Does this guy make his case?"
Yes. Let the markets work. Selling anything for less than the market price should be a voluntary act of charity.
I will concede he has made his case when they stop going after scalpers at sporting events... It seems to me that if it OK to "gouge" those that are in need from a disaster, it should be fine and dandy to get outrageous prices for scarce tickets to games...
As somebody who has been a contractor for 30 years dealing with these situations, I can tell you it is much more costly to provide services to people in these kinds of catastrophe situations.
It takes longer to get from place to place. I have great difficulty getting supplies and materials and they cost me more. I may have to pay more to get labor. The "friction" of business increases exponentially.
So either I need to charge more for a similar service or I can't afford to provide the services they desperately need.
In a vacuum he makes his point.
I operate a small grocery store in Virginia's Northern Neck. When Isabel came through here last year we were without power (and everything else) for a minimum of four days, some places, as much as two weeks. I kept the store open with a battery powered calculator, a cigar box, and a sidearm. I was the only game in town. I raised not one price. My ice and water went in a matter of hours.
I could have raised prices but would be paying for it today. As it is, people still comment on the fact that I was available and didn't try to take advantage of their grief. They even talked about me on one of the local radio stations that was up on a genset.
Had I, I would have far fewer customers today.
I understand the laws of supply and demand perfectly but profiting on the backs of my own neighbors during a time of universal suffering is not my idea of how to run a business or be a responsible member of a small community. I have to live here when the weather is nice too.
My two cents worth from personal experience...
I've often wondered how effective these restrictions on price gouging are, anyway. Couldn't a business owner circumvent them by simply announcing that he was selling his scarcest products at an open public auction in his parking lot?
He falls in the same category as those who blame the weather service. I'll have to say he's quite detailed and extravagent in his reasoning. Would have been far more efficient to say, "here's my dumbass idea".
well I suspect if someone tried selling water for $25 a gallon he would have no store left by the next day, some "natural" disaster would hit it in the middle of the night..
Walter E Williams, as usual, makes a better case:
http://www.jewishworldreview.com/cols/williams032404.asp
Market pricing is the fairest system of rationing. It's also the most efficient.
Capitalism in its purest form, like socialism in its purest form, do not take into account human nature. They both operate well on paper and in the ether of "theory".
However, when human nature is added to the equation capitalism becomes a form of darwinism. Only the strong (or those with money) will survive. Is it just that the one person in line who had the money to pay $15.39 for the ice was able to buy it whether he had a greater need or not?
Capitalists forget that we live in a society that, to insure its success, must take into account the diversities of human nature. Some people will have more than others and those that can't provide for themselves will need some help.
Capitalists refuse to see this. For them they only exist "to maximize profits".
No. The reason for anti-gouging laws is to make sure people don't die in the aftermath of major disasters because they can't afford the newly jacked-up prices for necessities. It's not about ivory-tower philosophy.
Besides, the 99 44/100% purity of capitalism this author seeks can't be found anywhere else in the United States, so why should he expect to find it in a hurricane zone?
Think 1974 and gasoline rationing in this country, all so prices wouldn't shoot up. What happened ? No supply, people hoarded, shortages and lines everywhere. Remember what happened when price controls were lifted - no shortages and no lines in a very short amount of time.
Bless the free market forever.
Smells like a libertarian at work.
Anyone who buys this will quit believing once they actually have to deal with price gouging and living disaster conditions.
That's true. Nixon's and Carter's price controls were a disaster. But comparing a short term disaster that affects one small area of the country, like Charley, with an event that affected the entire country over a period of months and years is wrong.
Am I on the right website? I thought we had compassion for our fellow man. To not kick someone when they are down is not anti-capitalism, it is an act of compassion and charity. To intentionally screw someone because of hard luck is just being a greedy bastard.
That headline sounds like a Mothers of Invention album title.
Ann and I were in Gulfport, MS during Hurricane Elena in 1985. Ice was perhaps $0.79 a bag before the storm hit. The day following the storm an enterprising gent brought a truckload in and proceeded to sell it from the K-Mart parking lot. The general manager of the store went out to check out the situation and asked the iceman what he was charging. $2 per bag was the reply. The manager told him to make it $1.50 per bag or he couldn't use the parking lot. No government official was involved. The manager was simply selling the use of his parking lot for a portion of the man's profits. He didn't push him all the way back to normal retail; he recognized that the man deserved some extra money for providing ice during the several day power outage.
Ann went to work that same day after the hurricane. With no power, several adjustments were made. Camp stoves, lanterns, batteries, and that sort of thing were placed on display right inside the entrance. Customers requiring items not in the front display customers were led by an employee with flashlight into the store. As the registers were not operating everything sold was recorded by hand. An emergency warehouse shipment was arranged and was planned to arrive about 11:00 that evening. Many customers came back to meet the shipment and most of them helped unload the truck.