Sunday October 30, 2005

Price gouging?

All this talk about “price gouging” post-Wilma has got us thinking. Actually, it started when we saw this guy on TV, charged in court and tar-n-feathered on the news, for selling cases of water for $10. How much is a case of water supposed to sell for? Critical Miami recently bought a case of water at BJ’s for $5. Mind you, this was well after the hurricane, and at a discount membership superstore. Was David charging more for the water then Publix? Yes. Was he getting rich off the suffering of hurricane victims? Unless he had a very high-volume operation going, it’s unlikely he was getting rich. Look: there’s a reason economists don’t get worked up about price gouging. Heck, even Wikipedia has some trepidation about it.

This price-gouging stuff started up after Andrew, when people were buying generators in upstate Florida, driving them down to Kendall, and selling them for twice the original price. Whether this is exploitation or free-market economics comes down to a matter of perception. As a society, we have made the collective decision that the former is the case. Is the unavailability of, say, gasoline, a consequence?

Say I’m a gas station owner. I see the reports of rowdy 3-mile lines and ornery customers. Am I going to bust my ass getting out of bed to open my shop for you assholes? Not for $2.83 a gallon, I’m not. Our guess, though, is that if you were one of the poor bastards who really needed to fill up last Wednesday, you’d gladly have paid $4.50 a gallon; all the more so if the line was shorter for all the people who suddenly realized they didn’t really need fuel so bad. So the price gouging law is what made fuel extremely difficult to buy.

Florida saw 246 price gouging reports during Wilma. Some are from assholes looking to make a quick buck, and some are from people looking to cover their costs while providing needed supplies to people in need.

Whatever. David Brown explains the idea better then we’re going to. Report price gouging if you must; just remember that that paying too much for something may be better then not having it at all.

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  1. MisterE    Mon Oct 31, 08:58 AM #  

    Talk about price gouging: they set that first guy’s bail at $25!!

  2. Sean    Mon Oct 31, 11:51 AM #  

    W/r/t price gouging, remember the debate over defining obscenity. In 1964, Justice Potter Stewart tried to explain “hard-core” pornography, or what is obscene, by saying, “I shall not today attempt further to define the kinds of material I understand to be embraced . . . [b]ut I know it when I see it . . .” Ditto price-gouging: easy to spot, tough to define. Libertarians, bless their puristic souls, want markets to run free and unreined as rutting razorbacks, so any governmental imposition on the price of goods and services is repugnant. Isn’t that adorable? Here on Planet Earth it just doesn’t work that way, which is the main reason Libertarians are so uncomfortable among its inhabitants.

  3. Defeded    Mon Oct 31, 12:09 PM #  

    If you don’t like the price, then you shall drink your tap water at room temperature for a week. But price gougers will be denied water for all eternity – in the fiery depths of hell.

  4. alesh    Mon Oct 31, 01:55 PM #  

    Yes, Sean, it is easy to define. The state legislature did it for you – raising the price above the previous 30-days’ average during a declared state of emergency.

    And just for the sake of argument, how does letting the markets run free “not work that way on Planet Earth” ???

    If you find David’s $10 case of water to be gougy (as our government did), drive up to Orlando, buy a truckful, come back, and sell it cheaper. Nothing simpler in the world, and it DOES work.

    When everybody wants a generator, the price of generators goes up – that ensures that the people who get them are the people who really need them, NOT the people who happened to be first in line.

    Is that unfair?

  5. Clubby    Mon Oct 31, 03:37 PM #  

    Funny… last time I went to a club on South Beach, I paid $5.oo for a single Publix Brand bottle of water… if you factor that price a case would be $100.

    Oh well, I guess it is too late to report Liquid (the Club has been closed for years now).

  6. Sean    Mon Oct 31, 04:42 PM #  

    And just for the sake of argument, how does letting the markets run free ‘not work that way on Planet Earth’???—Alesh

    You don’t get out much, do you lad? Our atmosphere doesn’t suit your Libertarian lungs…but you go on with your gassin’ unhindered. Can you find me one economic model in any civilization other than a barter-based micro-social tribe somewhere where your free market system goes 100% unregulated? Save yourself: No, you cannot. There are too many hands out, interests involved, checks to be balanced. Not sayin your ideas are wrong, just unrealistic, impractical, pie-in-the-sky. Maybe even…..otherworldly.

  7. George Orwell    Mon Oct 31, 06:08 PM #  

    It’s always fun—sometimes inpsiring!—to think Libertarianistically. If only the world would operate so rationally, so logically, so efficiently. It’s kind of like religious thought, except most religionists (or any idealists other than Libertarians and a few stray fascists) wouldn’t be happy with its results: whole nations filled with millions of desperate, starving people who lose the game because they can’t conduct business. Imagine 75% of the world with the economy and social structure of Haiti. That’s where your Libertarian economy would lead you.

  8. brian    Tue Nov 1, 09:16 AM #  

    i paid $4.50 for a bud light saturday night at sand bar in the grove. gouging? perhaps not, but i thought that was a bit excessive, regardless.

  9. Sean    Tue Nov 1, 12:01 PM #  

    A Bud Lite? Only way that’s not gouging is if they’re paying you to drink it.

  10. Hugo    Tue Nov 1, 07:10 PM #  

    I don’t know how theme parks can get away with charging a million dollars for water and the such. But come on, hurricane Wilma was a natural disaster – no need to make people suffer even more. Why the day after the hurricane some people did not have water is beyond me though.