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From a political standpoint, I see the point. Price gouging makes people extremely mad, and it redirects goods from poor people to wealthy people. When temper

From a political standpoint, I see the point. Price gouging makes people extremely mad, and it redirects goods from poor people to wealthy people. When tempers are already fraying and maintaining social order is already difficult because of an emergency, the last thing a government needs is a nucleus for lots of pissed-off people to rally around. Remember that the first priority of any government is to keep itself in power. Governments that don't accomplish this are no longer governments. Efficiently allocating goods is a secondary consideration that helps them achieve this, but if doing so means they end up with a revolution or rebellion anyway, it wasn't very effective.

logicchains 7y ago
>it redirects goods from poor people to wealthy people. In this case it's arguably something desirable, as the most at-risk group, the elderly, on average are much wealthier than young people. Someone over 80 is around 100x more likely to die from the virus than somebody under 40.
- nostrademons 7y ago
  Think in terms of the survival of the government, not in terms of general social welfare. If you have a lot of pissed off poor young people, they're often fairly socially well-connected, they're more aggressive, they're able-bodied, and they can fight. If you have a lot of pissed off old people, they'll continue to be pissed off but probably won't make a whole lot of trouble. They might make a lot of trouble come election day, but in an emergency the priority is the survival of the government now, so that you can get to the next election. This is not an academic thought exercise, BTW - a lot of the social unrest of 2019 in Venezuela, Chile, Hong Kong, Zimbabwe, Iraq, etc. came from prices rising quickly enough that young people could not afford basic necessities.
  - KarlKemp 7y ago
    You’re overdoing the “priority of governments is to survive”-shtick. Any number of administrations have lost elections, for example. Very few tried to stay in power. There is absolutely zero risk of a violent overthrow of the California state government right now. Even if politicians were as craven as you suggest, you have already noticed how lame your argument is with regards to age groups: old people have far more power on Election Day.
dmix 7y ago
Pictures of empty shelves on social media is causing panic and driving more shortages. This is a lose-lose situation for gov interference. This sort of punitive response will always be far too late or too little to be effective anyway. The markets will respond far faster with supply than setting price ceilings and fining random opportunists will. So few people question whether it will actually work in the real world before asking if in an ideal scenario it is an effective idea. I mean what’s going to happen next time? Are they going to lock up all the TP and ration it out on first signs of any sort of epidemic or other causes or panic? Because that’s when the hoarders and grey market guys were already stocking up.
- nostrademons 7y ago
  The point is to serve as a disincentive to ordinary people thinking "Oh, I can make a lot of money doing that." It crossed my mind, when news of the coronavirus first broke, that I could make a lot of money speculating in toilet paper, canned goods, rice, and beans in the near future. (I did all my prep shopping 3 weeks ago, but didn't buy more than we personally needed as a family.) I didn't because a.) a little voice in my head said "Do you really want to be that asshole?" and b.) it occurred to me that it was very likely that powers that be (governments and market platforms like Amazon) were going to crack down very hard on scalpers, and it was not worth going to jail for. Turns out I was right about that - people are not going to jail (in the U.S. at least, I heard they may be in Europe), but they're facing $5000 fines per item or eating the cost of buying & disposing of the items because Amazon revoked their seller license. The point of highlighting laws like this is so that people aren't tempted next time there's emergency to do the same thing.
deleted 7y ago
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jmckib 7y ago
Letting supply and demand determine prices doesn't necessarily redirect goods from poor people to wealthy people; it redirects goods towards those that actually need them, because those people are willing to pay the higher price. If we're talking about someone living paycheck to paycheck who really can't afford toilet paper being 2x more expensive, they may have to use a substitute, but with price ceilings the shelves will be empty anyway.
- nostrademons 7y ago
  When it comes to daily essentials like housing, food, medicine, and toilet paper, everybody needs them - that's why they're called "essential". When you have a good that everyone needs, the market-clearing price becomes a function of ability to pay, not willingness to pay.
  - jmckib 7y ago
    Toilet paper isn't an essential (as a lot of us are now finding out). Also nobody really needs to hoard like 50 packages of toilet paper, and if prices were allowed to increase to reflect demand then people would be less incentivized to hoard. The same goes for real essentials like food and medicine: letting prices rise keeps people from hoarding needlessly, and it incentivizes producers to increase supply. I'm not saying we should let people starve, but price ceilings are just going to cause shortages of essentials anyway.

logicchains 7y ago

>it redirects goods from poor people to wealthy people. In this case it's arguably something desirable, as the most at-risk group, the elderly, on average are much wealthier than young people. Someone over 80 is around 100x more likely to die from the virus than somebody under 40.

nostrademons 7y ago
Think in terms of the survival of the government, not in terms of general social welfare. If you have a lot of pissed off poor young people, they're often fairly socially well-connected, they're more aggressive, they're able-bodied, and they can fight. If you have a lot of pissed off old people, they'll continue to be pissed off but probably won't make a whole lot of trouble. They might make a lot of trouble come election day, but in an emergency the priority is the survival of the government now, so that you can get to the next election. This is not an academic thought exercise, BTW - a lot of the social unrest of 2019 in Venezuela, Chile, Hong Kong, Zimbabwe, Iraq, etc. came from prices rising quickly enough that young people could not afford basic necessities.
- KarlKemp 7y ago
  You’re overdoing the “priority of governments is to survive”-shtick. Any number of administrations have lost elections, for example. Very few tried to stay in power. There is absolutely zero risk of a violent overthrow of the California state government right now. Even if politicians were as craven as you suggest, you have already noticed how lame your argument is with regards to age groups: old people have far more power on Election Day.

dmix 7y ago

Pictures of empty shelves on social media is causing panic and driving more shortages. This is a lose-lose situation for gov interference. This sort of punitive response will always be far too late or too little to be effective anyway. The markets will respond far faster with supply than setting price ceilings and fining random opportunists will. So few people question whether it will actually work in the real world before asking if in an ideal scenario it is an effective idea. I mean what’s going to happen next time? Are they going to lock up all the TP and ration it out on first signs of any sort of epidemic or other causes or panic? Because that’s when the hoarders and grey market guys were already stocking up.

nostrademons 7y ago
The point is to serve as a disincentive to ordinary people thinking "Oh, I can make a lot of money doing that." It crossed my mind, when news of the coronavirus first broke, that I could make a lot of money speculating in toilet paper, canned goods, rice, and beans in the near future. (I did all my prep shopping 3 weeks ago, but didn't buy more than we personally needed as a family.) I didn't because a.) a little voice in my head said "Do you really want to be that asshole?" and b.) it occurred to me that it was very likely that powers that be (governments and market platforms like Amazon) were going to crack down very hard on scalpers, and it was not worth going to jail for. Turns out I was right about that - people are not going to jail (in the U.S. at least, I heard they may be in Europe), but they're facing $5000 fines per item or eating the cost of buying & disposing of the items because Amazon revoked their seller license. The point of highlighting laws like this is so that people aren't tempted next time there's emergency to do the same thing.

deleted 7y ago

[deleted]

jmckib 7y ago

Letting supply and demand determine prices doesn't necessarily redirect goods from poor people to wealthy people; it redirects goods towards those that actually need them, because those people are willing to pay the higher price. If we're talking about someone living paycheck to paycheck who really can't afford toilet paper being 2x more expensive, they may have to use a substitute, but with price ceilings the shelves will be empty anyway.

nostrademons 7y ago
When it comes to daily essentials like housing, food, medicine, and toilet paper, everybody needs them - that's why they're called "essential". When you have a good that everyone needs, the market-clearing price becomes a function of ability to pay, not willingness to pay.
- jmckib 7y ago
  Toilet paper isn't an essential (as a lot of us are now finding out). Also nobody really needs to hoard like 50 packages of toilet paper, and if prices were allowed to increase to reflect demand then people would be less incentivized to hoard. The same goes for real essentials like food and medicine: letting prices rise keeps people from hoarding needlessly, and it incentivizes producers to increase supply. I'm not saying we should let people starve, but price ceilings are just going to cause shortages of essentials anyway.