Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Prices at the gas pump are on the way up, went up around 30 cents since yesterday. I do not consider that gouging but asking $5 for a bottle of water in a disaster area is another story.
Because you would know face to face how it all really works , and no way you be ok with being jacked for some basic water with 3 children at home, one special needs and nothing open and no way to get there and applaud the thief. You would want them exposed and brought to justice .
#2 - if you are a business owner and you exploit disasters for profit, you're human scum, i don't care if it is good for your business or your 'fiduciary duty' or not.
Disasters cause demand spikes, and in a properly functioning free market demand spikes will result in higher prices.
Consider the bottle of water example. Let us say bottled water costs $2 per bottle normally. OK, natural disaster hits and there is a local run on bottled water that causes an immediate shortage. Absent price controls, the responsive entrepreneur who is 200 miles away thinks "hey, I'll buy up all the water around here for $2 and go to disaster zone where the shortage is happening and charge $5 per bottle, and make a tidy sum for myself." With price controls that make this ABSOLUTELY PROPER economic thinking illegal, this person figures why bother, because there's no profit, thus no incentive. They stay home and so does the water they were going to go gouge on.
Now from some lofty, theoretical view of social justice, that person being denied the chance to make a profit on a demand spike caused by disaster and human suffering is a victory, but in real world, on the ground reality terms, all the water that person was going to move there according to the profit motive is now no longer going there. The shortage continues, but we upheld lofty social ideals. Yes, you are thirsty, but you are not being "gouged", right?
Prices, to paraphrase half the economists who ever wrote on the subject, are not arbitrary things. They are a response to supply and demand. When supply remains static or goes down while simultaneously demand is going up faster than normal, prices will, and should, spike. By allowing that spike, capital flows in the direction it will satisfy the most people according to their self-interests. Keep government coercion and control out of the equation, and no disaster would ever have a shortage. The first few in would make the most profit, then the local market would get saturated with goods and services all trying to cash in. Instead of shortage, there would be a glut of bottled water, gasoline, generators, canned food, etc.
Profit is not evil. It is the driving force behind virtually every good thing mankind has ever accomplished where they weren't forced at gunpoint.
^^^^^This. If you want EMPTY SHELVES with no availability of goods, then implement forced price controls.
Prices at the gas pump are on the way up, went up around 30 cents since yesterday. I do not consider that gouging but asking $5 for a bottle of water in a disaster area is another story.
Its not gouging but I believe they are raising prices on gas they already have and purchased at the lower price. The commodity price goes up and the stations raise the price. But it seems to go back down a lot slower.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
