Houstonians Are Thankful for 'Price Gouging'
If the government sets a price ceiling (let's say $3/case for bottled water) what do you think would happen?
The first person showing up would buy the entire pallet, then turn around and sell it for $50/case (black market).
Thanks government.
Lets put our Economics degree to work here:
Its called INVENTORY CONTROL. If the prices remained the same the first people in the store would buy out everything leaving NOTHING for everyone else. The price increases ensure that the "supplies" go to those who need it not those who get there first and plan to horde it.
Prices are the natural mechanism to ensure rationing allowing more people to get access to the water.
Artificially restricting the price of goods in a crisis doesn't incentivize people to solve the problem. Let's say those in the affected area of Texas can't get a good, like water. All of it is sold out, because it's so cheap. And distributors have trouble getting it there, because their channels of distribution are built around large-scale delivery. Airports, trucks, etc. are all hampered right now due to the conditions.
*This is where the free market should take over. People in West Texas may have a load of water. But they aren't going to have any incentive to load up their car and drive all that water to the affected area if the prices are restricted. *
*If the prices are allowed to be $40 for a case of water, those people can make money by driving it in and they have a big incentive to do so. The market using increased prices incentivizes more to attempt the bring a scarce good into Houston. That sort of capitalism, while morally questionably maybe, can solve major shortages MUCH faster than the large distributors or the Red Cross.
What's more important? Solving the crisis of availability of critical products? Or establishing and maintaining a moral high ground?
Allow the market to control the prices and you'll solve your supply issues much faster that the government can.
Also, as an aside, anyone here care to know what $8.76 on a gas sign means?
It's the default sign number that means either a) there is no gas left or b) they just turned the signs on or c) the signs aren't communicating with the price-setting software.
But yeah, "evil capitalists" probably gets more shares and resteems...
Also applicable:
http://www.jasonstapleton.com/644-i-love-price-gouging-and-so-should-you-heres-why/
People who stocked up on water and gasoline ahead of the disaster do not have to buy $50 water bottles. People who didn't stock up and paid no attention to the weather, must use their emergency fund. No emergency fund? Ask that neighbor you never talk to, he may surprise you with a beer. Or ice cream, or hamburgers.
Libs do not believe that that preppers should be rewarded for their effort. Forget supply and demand. They believe everyone is entitled to cheap supplies, even during a crisis. And the gov'mnt will save them from the evil capitalists. @ironshield
And, of course, you also have the option of saying "At $40 for a flat of bottled water, I'll take my chances with rain water."
That's also part of capitalism...
Very good point, never thought about it but yes this would prevent people from over hoarding. I guess the facebook poster that created that meme didn't think of that ;)
Hopefully the businesses are using that profit to give back to the community after the disaster though..
Well said, also if the market is allowed to function, and a seller prices an essential way too high, say $1000 for a case of water in a crisis, they risk being paid in 115 grains of lead instead of cash. Welcome to the jungle progresives.
Price what the market will support and there is more for everyone, sell cheap and as you say, first one in will just buy it all.
And as far as "well what about all the profit from the vendor." I dont' know about you but I'm not staying open in a crisis to sell $3 water and risk being drowned or robed. The mark up incentivies vendors to aquire more needed goods for their customers and take the necisary risks to distrubute them.