The reason vendors were able to charge so much is because it was so impractical to get extra supplies there on such short notice. The case being made isn't that the supply reflexively adjusts, it's that if there are big bucks being made, people will take notice in anticipation of the next catastrophe.

When is this expected to start happening?

If they were allowed to raise prices, there wouldn't have been as much of a run on the gas.

My point was entirely about supply not increasing. I said nothing about demand. That there is less demand for $20 gas than there is for $5 gas isn't at issue. That price doesn't drive supply when supply is otherwise nearly perfectly constrained by other factors was my entire point.

Nowhere have "fringe suppliers" appeared as one would expect if one believed economists.* You do get the occasional arbitrage agent who will buy up Walmart's local supply of toilet paper and resell it for higher prices, but that isn't even remotely an increase in local supply.

*Other than the dude who brought 3 generators to town. There were no pop-up stores creating additional supply.

probably when they change the price control laws, lol

lowering demand so that the gas doesn't run out in a time of emergency is pretty important, don't you think? You don't want people buying more than they need in a panic.

Exactly how much gas does a person need in an emergency?

Unsure, but allowing the market to dictate that is better than having no gas left for anyone.

The market dictates need in time of emergency?

better so than price controls, yes. Would you rather 5 people have more than enough gas than they need or for many more people to have at least some gas?

Neither the market nor price controls dictate need. The emergency dictates need. If the market dictates need, does the person with zero dollars have no need?

It's basic supply and demand. If the supply is low compared to the demand the price goes up and then people can make a profit by filling the supply. What I don't understand is why people demonize the guy who is profiteering off the emergency by charging $100 for a bottle of water? He is supplying water to people who are desperately thirsty. He deserves to be rewarded for his efforts. Why is it okay to sit on the couch and do nothing, but somehow immoral to be out there providing exactly what people desperately need?

Because historically they haven't increased supply. It's not a profitable endeavor for private business to have the supply for random events that occur infrequently in random locations. They simply take the existing supply and price gouge. By doing that they severely harm the poorest people who were least able to be prepared to begin with.

Should only the people who can afford to pay $100 per bottle of water in an emergency be allowed water? Or should there be a system where we try to take care of all the citizens? You're literally advocating kicking a man while he's down.

How would you feel if you were desperately thirsty during a crisis and the government said "We're going to let profiteers handle this crisis and charge whatever the market can bear. If you can afford water at $100 per bottle you'll survive. If not, tough titties."?

Do you think that's better for people than the government saying "Look this is a very unique situation, and we're not going to let the rich profiteers just **** over the poor people during their time of greatest need."?

But if you impose a price control on the market you're only going to have shortages. Better for something to be expensive, but available, then cheap, but not available. See Venezuela, where rigorous price controls coupled with hyperinflation have ruined the economy to the point where everyone had to flea for Colombia and Peru. Look all this heavy handed government intervention might be well intentioned, but you can't just stick your fingers in your ears and scream "nyah-nyah-nyah I can't hear you" and expect economic law to just disappear.

So yes, absolutely, I think that during a natural disaster people should be able to charge $100 for a bottle of water, and I think that if the price does reach this level then absolutely people will be inclined to go the extra mile to supply water at this price until the price comes down. That is how the market works. If there is a lot of demand, and not much supply, price increases, entrepreneurs realize they can profit, supply increases, demand stays the same, price decreases, and eventually you reach an equillibrium and everyone is happy or at least everyone is equally unhappy. Supply and demand, it is how the market functions and you don't need the government to step in and get in the middle of the process, and if the government does get involved there will be unintended negative consequences like shortages / unsold surplusses.


Like if you say "people can only sell bottles of water during this crisis for $2 like normal" then the "evil profiteer" who would be selling his bottle of water for $100 would just say "**** ya'll" and keep the water in his backpack for when he gets thirsty. So now, the guy who was so thirsty he would actually have paid $100 for the water can't do that, and instead gets sick after drinking some polluted ditch water instead. But at least he wasn't exploited by the evil capitalists so we can all thank Bernie Sanders for his hard work and feel good about ourselves.

You can't compare natural disaster management to ongoing problems, caused by poor leadership, in Venezuela. If you can't see the differences in those problems I'd encourage you to look at the problems closer.

Secondly, as a society we've developed a very good system of disaster management. It's far from perfect but to think that it'd be better to just turn it over to profiteers is naive. This problem is far more complex than simple supply and demand. Please try to consider not only the disaster itself but also the macro implications for society.

Please give some thought to some of the problems caused by thousands of unregulated profiteers rushing into a disaster zone seeking to maximize their profit and exploit people in their greatest time of need.

Based on what?
It would never show up in writing - you don't itemize your stock on the basis of why you're holding it.

If you're able to sell at significant premiums on non-perishables and live in an area prone to natural disasters though you'd be a fool not to keep extra stock on hand. There're large numbers of individuals who live in disaster prone areas who stock up on essentials for the exact same reason. The only reason a business wouldn't is if they're not able to realize the benefit of keeping that extra stock on hand.

What would constitute evidence in your eyes? Do you need a business owner to make an unpopular declaration that he held an extra 1,000 units of bottled water in reserves in case there's a hurricane because he knew he'd be able to charge 5x the price? They'd be shooting themselves in the foot.


The two aren't mutually exclusive. In the event that prices are prohibitively high they can provide financial aid to carry people through the worst of it. You'd still want to have some mechanism to distribute it to people on the basis of how much they value it.

And how would you feel if they didn't increase prices and the first few people who got to the store bought up the entire supply saying "tough tits, shoulda gotten there sooner"?

If their answer is solely to keep prices sticky then yes, it is better to do nothing. Other options like sales volume caps might be an improvement though i have a hard time picturing how they'd enforce something like that.

I'm not sure anyone is saying get rid of government responses to help people in emergency. We are saying let people go down and help out the people before the government arrives, which they are likely to do if there are no price controls in place.

I don't think you've thoroughly considered the ramifications of "let people go down and help out". First off, they aren't going down to "help out". Secondly, the last thing you want is a bunch of randos going down into a disaster area to sell **** and exploit people during their time of suffering.

The goal is generally to remove as many people from a disaster area as possible. You don't want a bunch of unregulated people showing up to sell **** during a natural disaster. Think about the problems it will generate.

Some of these profiteers will wind up needing rescued themselves. Will these profiteers be subject to the same regulations, taxes, and consumer protections as any other business? What recourse do the people who get screwed by these guys have? Please think through the long list of problems with this idea. It's stupid, bound to cause numerous problems, and dangerous.

You can look at the influx of shady contractors, and the huge problems they cause, that show up after any natural disaster and see that this is a terrible idea.


Why do you think there are anti gouging laws in the first place? It's because people were getting ****ed over and it was making the problems worse.

Im not sure we are ever going to agree, just realize most economists, even liberal ones, are on my side. https://www.huffingtonpost.ca/peter-...b_3487621.html

I'm not particularly wealthy, but $100/gal gas would make absolutely no difference to the amount of gas I'd buy to escape a natural disaster (or run my generator). I'd, in turn, buy no more than would fit into my gas tank, even if the price were $0.01/gal.

I think the problem with our argument is that you believe that market forces are like physical forces. They aren't. Price discovery* only works under certain circumstances and with certain assumptions that aren't true during a short-term market dislocating event such as a natural disaster.

Can I assume that you realize that the only reason why someone like me doesn't clear out all of the bottled water off of every single shelf in every single Walmart within 100 miles of a disaster is because of anti-gouging laws? The profit I could make with my pop-up water stores would be amazeballs!

There are many markets with no price restrictions. There aren't massive influxes of external supply when there is a natural disaster in these markets. Literally no new air carriers popped into existence to fly people out of Hawaii recently.

*a phrase worth at least knowing, since the entire argument against restrictions on free markets rests entirely on it.

For a lot of people $100/g is enough to buy half a tank instead of the full tank. It also deters people from filling up gas cans which many would for even the remote possibility that they require it after escaping the critical danger zone to avoid being stuck on a remote highway.

If the price doesn’t impact the amount anyone buys then it’s not set high enough.

Having the prices set high also strongly encourages people to split costs by carpooling.

So, since price gouging did actually occur (since no one was apparently aware it was illegal in Texas), there were no issues I guess.

Also, how did no one take charge and set the price high enough?!?

Of course there were issues. But if gas prices didn’t go up a lot of people would be much less likely to share rides, people would buy more gas than they need to get out of the dangerous areas, some would fill extra gas cans for above mentioned reasons, and a large(r) number of people would be left without any access to gas at all.

My point was that IF no one changed their buying habits it wasn’t high enough. Some people definitely did.