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You're ignoring inelastic demand, which would happen in the case of a disaster area. If a company is one of or the only company that can bring something import

by yladiz 9y ago

You're ignoring inelastic demand, which would happen in the case of a disaster area. If a company is one of or the only company that can bring something important/necessary like generators to a disaster site, and the company knows this, it will charge more than is fair, e.g. more than the cost of the generator plus the expenses of transporting them. Price gouging generally hurts the people that need the product the most because they have no choice, and many people consider it unethical in cases like disasters. This situation is similar to the economics of life saving medicine, because its demand is also inelastic. Also I don't think it's fair to use the term "someone", because it's often a company that does something like this. Don't humanize companies.

Radim 9y ago
I find your idea of "ethical" and "fair", highly unethical and unfair. Such social engineering has a long and bloody history of turning around and disproportionately hurting the poor and the weak, in unexpected (sic!) ways. That is the socialist tragedy -- think with your heart, but only one step ahead. "… the government should not support the people. The friendliness and charity of our countrymen can always be relied upon to relieve their fellow-citizens in misfortune. This has been repeatedly and quite lately demonstrated. Federal aid in such cases encourages the expectation of paternal care on the part of the government and weakens the sturdiness of our national character, while it prevents the indulgence among our people of that kindly sentiment and conduct which strengthens the bonds of a common brotherhood." - Grover Cleveland, 22nd US president, 1887
- yladiz 9y ago
  If this is the 'socialist tragedy', then the capitalist tragedy is to think with your wallet until it's too late to realize your wallet has no morals.
ThrustVectoring 9y ago
Elasticity of demand doesn't matter, more just elasticity of supply. What elasticity of demand does in an emergency is help ration goods. If you're considering buying ice, and ice becomes temporarily much more expensive, you'll cut out elastic demand (eg, having cold drinks), which leaves more ice available for inelastic demand (eg, keeping insulin from spoiling). >Also I don't think it's fair to use the term "someone", because it's often a company that does something like this. Don't humanize companies. I had a specific example in mind: John Shepperson, who, in the aftermath of Hurricane Katrina, bought 19 generators, rented a U-haul, and drove from Kentucky to Mississippi. He got arrested and the generators were confiscated. This is not the sort of incentive that we want to provide. If it's possible for higher prices to induce supply, you want to let high prices induce supply and let the magic of price information do its work. The modern capitalist system is high magic, and prices are an important piece of how the magic works. Remember when fidget spinners got suddenly popular? March of this year they weren't a thing, and in April they were in pretty much everywhere. Messing with prices is how you break the magic. Do Not Mess With Prices.

by yladiz 9y ago

Radim 9y ago

I find your idea of "ethical" and "fair", highly unethical and unfair. Such social engineering has a long and bloody history of turning around and disproportionately hurting the poor and the weak, in unexpected (sic!) ways. That is the socialist tragedy -- think with your heart, but only one step ahead. "… the government should not support the people. The friendliness and charity of our countrymen can always be relied upon to relieve their fellow-citizens in misfortune. This has been repeatedly and quite lately demonstrated. Federal aid in such cases encourages the expectation of paternal care on the part of the government and weakens the sturdiness of our national character, while it prevents the indulgence among our people of that kindly sentiment and conduct which strengthens the bonds of a common brotherhood." - Grover Cleveland, 22nd US president, 1887

yladiz 9y ago
If this is the 'socialist tragedy', then the capitalist tragedy is to think with your wallet until it's too late to realize your wallet has no morals.

ThrustVectoring 9y ago

Elasticity of demand doesn't matter, more just elasticity of supply. What elasticity of demand does in an emergency is help ration goods. If you're considering buying ice, and ice becomes temporarily much more expensive, you'll cut out elastic demand (eg, having cold drinks), which leaves more ice available for inelastic demand (eg, keeping insulin from spoiling). >Also I don't think it's fair to use the term "someone", because it's often a company that does something like this. Don't humanize companies. I had a specific example in mind: John Shepperson, who, in the aftermath of Hurricane Katrina, bought 19 generators, rented a U-haul, and drove from Kentucky to Mississippi. He got arrested and the generators were confiscated. This is not the sort of incentive that we want to provide. If it's possible for higher prices to induce supply, you want to let high prices induce supply and let the magic of price information do its work. The modern capitalist system is high magic, and prices are an important piece of how the magic works. Remember when fidget spinners got suddenly popular? March of this year they weren't a thing, and in April they were in pretty much everywhere. Messing with prices is how you break the magic. Do Not Mess With Prices.