Tuesday, September 07, 2004

Gouging....HOOAH....GOOD God, y'all....What is it GOOD for?

When I walk into a Circle K, to buy ice, is it because I love the owner and want to make sure he stays in business. Probably not; I walk in there to take advantage of him, because the value of the ice to me far exceeds the price he is charging.

And does Circle K man open his store out of love for me, out of concern for my welfare? He does not. He opens because the price he can charge for ice exceeds the cost of production, and he can make money.

In other words, we are taking advantage of each other, and both of us are better off. (Here is an ad, where Circle K advertises the fact that they have ice. Watch out for the bowling ball, tho!)

And....now? Millions in Florida are without power. And, therefore, without ice. That means lots of people want to buy ice. But, Florida has a robust anti-gouging law.

The result is that, if you wanted to drive to Florida with truckloads of ice, and try to sell it at the market price, you would be arrested. Does that make sense? Sure, the people who might drive down there with the much-needed ice are doing it out of greed. Who cares? The people buying it are doing THAT out of greed, too. They certainly aren't worried about truck man's welfare.

Outlawing price-gouging makes sense, if you think that statutes, and vague feelings that scarcity is somehow wrong, create reality. Me, I think that physical facts, like people's need for ice to save freezers full of soon-to-be-rotting food, matters more.

An excellent article on price-gouging after Charlie. And another article, for background. And, another, yet again. In the latter two articles, the claim is that citizens were "hit with price-gouging." No, no, no. Citizens were hit with scarcity, since there isn't enough stuff to go around. People who like price-gouging laws simply refuse to accept the physical reality of "not enough." Higher prices reflect scarcity, rather than cause it. And higher prices, if allowed to do their magic, might ameliorate "not enough."

(Yes, this rant continues K. Grease's previous rant. And I may rant about this again).

1 comment:

Anonymous said...

The Attorney General of Alabama said today they would not tolerate price gouging of any sort. To bad he isn't with homeland whatever. The rich oil barrens of this country and all of the petroleum industry people are going to make a killing off backs of every American. To take advantage of this southern catastroghy is bourdering on the criminal side.