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> The higher price means that those who demonstrate a higher desire for an item (by their willingness to pay) end up getting it. The hoarding profits are a char
by geofft 7y ago
> The higher price means that those who demonstrate a higher desire for an item (by their willingness to pay) end up getting it. The hoarding profits are a charge to the rest of society for a more efficient distribution of the item compared to 0.
> What bothers people here primarily is that hoarders made money while everyone else is suffering.
No, what bothers me is the assumption that "higher desire" means "more willingness [and ability] to pay," and that "more efficient" means "assigned to the people with higher desire." For reasons of life and death (which I, personally, find more important than the principle of a free market), I think a "more efficient" tool should be one that distributes to people with higher need, and need is generally not correlated with ability to pay. It may even be inversely correlated: I as a tech worker can just stay home for weeks, and I haven't needed a drop of hand sanitizer. Someone who drives buses or makes hamburgers can't do that and must be out in the world for their job, and their jobs pay them a lot less than my job does.
So, government rationing would be an "efficient" solution in my definition, yes, but there's a milder option here: use the government's influence to artificially prevent the price of the product from rising. Then there's no incentive for people to buy large quantities with the purpose of reselling it, and it's more likely that everyone will buy the small amount that they need.
- rahimnathwani 7y ago"use the government's influence to artificially prevent the price of the product from rising" How would that work? If Dollar Tree were fully stocked with hand sanitizer, I would go there right now and buy 10 bottles. But so would 99 other people. So we 100 would get all the 1000 bottles, and everyone else would be SOL.
- geofft 7y agoWhy would you buy 10 bottles? What are you going to do with them? Are you afraid they're going to run out? Why? (Put another way, why aren't you buying 10 bottles of drain cleaner right now?) One of my local pharmacies had hand sanitizer in stock for $3 and no obvious limit on purchases. I bought one, because I needed one, and I expected that (because my locality had announced anti-price-gouging laws) I could go back and buy another one if I needed it. But it kind of lasts for a long while.
- rahimnathwani 7y agoI would buy 10 because that would last me 2 months (current expectation) to a year (normal usage), so I don't need to think about it for a wbile and, yes, I would not need to worry that they would run out. "I expected that (because my locality had announced anti-price-gouging laws) I could go back and buy another one if I needed it" Anti-price-gouging laws might stop people selling at high prices near you, but they don't stop people buying up all local supply, and re-routing it to places without such laws.
- KyleJune 7y agoThat's why we need rationing in addition to anti price gouging laws. Anti price gouging laws make it riskier for people to buy large quantities with the intent to just sell it for a profit. If there was a high risk of punishment, people like the guys who went around Tennessee buying all of the available local supply of hand sanitizer with the intent to price gouge wouldn't have done so. Then rationing(like limits on how much of an item can be purchase at a time) would make it harder for individuals to buy more than they need. When there is a massive line of people just to get toilet paper and other basic necessities like we have seen at stores the past few days, people would be less likely to go through the hassle of finding the items and going through line again. Without a purchase limit, some people will completely fill up their carts leaving those who were not quick enough with less. The fear of people bulk buying the whole supply and the knowledge that people will do it to price gouge just increase the amount of panic and make more people feel the urge to go and buy in bulk. https://www.marketwatch.com/story/tennessee-man-sitting-on-almost-18000-bottles-of-hand-sanitizer-says-hes-doing-a-public-service-2020-03-14 https://www.marketwatch.com/story/tennessee-man-sitting-on-a...