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To be fair, price gouging laws prevent companies from increasing prices of goods like, say, toiletpaper, such that they remain in supply. Thus the shortages. I
by __blockcipher__ 7y ago
To be fair, price gouging laws prevent companies from increasing prices of goods like, say, toiletpaper, such that they remain in supply. Thus the shortages.
In other words, we already have “soft” price-fixing.
- lalaland1125 7y agoPlease stop spreading misinformation. The price gouging laws allow prices to increase without limit to pay for increased wages or costs: https://oag.ca.gov/consumers/pricegougingduringdisasters#8C https://oag.ca.gov/consumers/pricegougingduringdisasters#8C
- WalterBright 7y ago> The price gouging laws allow prices to increase without limit to pay for increased wages or costs Higher profits from gouging is what motivates people to increase the supply. Altruism only goes so far. Profit motive to provide needed supplies is far more effective. Remove the profit motive, relying on the government and altruism, is a very poor substitute.
- freeone3000 7y agoThe flip side is that in times of crisis, poor and vulnerable populations are literally priced out of essential goods.
- WalterBright 7y agoNo availability at all is worse than availability at a high price.
- heartbeats 7y agoThe availability is the same, though. If you manage to prevent reselling, then the choice is rather easy: * 100 rolls of toilet paper sold to whoever comes first * 100 rolls of toiler paper sold to whoever bids highest
- WalterBright 7y ago> The availability is the same, though The point is, gouging creates MORE availability. Remember those hurricanes? People outside the devastated zones promptly filled jerry cans with gas, drove into the disaster area, and sold gas out of the back of their pickup trucks for high prices. That is, until the government made it illegal to do that. The next disaster meant people had no gas until the government got around (days later) to bringing some in and rationing it. TP is not quite the inelastic situation you posit it is. For example, there's been a boom in sales of bidet toilet attachments. High prices for tp make it very attractive to switch, thus making tp available for others. High prices mean people who already have more tp than they need will be tempted to sell it. High prices mean TP makers will ramp up production as fast as possible. High prices mean people will be motivated to make & sell TP alternatives. High prices mean people have no reason to hoard TP. Anti-gouge laws lead directly to hoarding and no TP available.
- heartbeats 7y agoToilet paper makers already make large amounts of it - the limiting factor is how often supermarkets can restock shelves.
- WalterBright 7y agoGouging overcomes whatever the limiting factor happens to be. The profit motive is very powerful at moving around obstacles.
- freeone3000 7y agoIf you can't afford the price, there's no difference.
- vkou 7y agoHoarding toilet paper will not increase supply of it. The toilet paper manufacturers are not making any more of it, because this is a temporary blip on the demand side, and because they know that they aren't going to sell any more toilet paper in the long run. Hoarding resources that we aren't globally in short of, actually makes the situation far worse. The demand spike is solely caused by hoarders and price gougers, to the detriment of everybody else.
- WalterBright 7y agoLaws against gouging actually motivate people to hoard. Then come the laws against hoarding, which people do anyway, they just do it secretly.
- vkou 7y agoShortages motivate people to hoard. Gouging causes artificial shortages.
- WalterBright 7y agoThere are no shortages when gouging is allowed. Gouging disincentivizes hoarding. See my other posts in this thread. Anti-gouging laws mean that you'll either do without or pay even higher prices for black market goods. The more you punish black marketeers, the higher go the prices you'll have to pay.
- vkou 7y ago> There are no shortages when gouging is allowed. There are when a bunch of people buy up the entire supply, and try to resell it at 5x the rate. > Gouging disincentivizes hoarding. Only after the gougers have hoarded everything they can. The gougers in this case aren't making any more toilet paper appear in the world. The factories aren't making more of it, just because a few people bought it out, because the global demand for it is constant. They simply created an artificial shortage, and introduced themselves as a parasitic middleman.
- __blockcipher__ 7y agoI’m not spreading misinformation. On the contrary, your link validates what I said. Countering misinformation is good, but please don’t call it misinformation if you don’t understand what the text you link says. Prices need to be able to increase beyond just any cost increases from the TP manufacturer. Without freedom to set prices as desired, we will continue to have shortages.
- lalaland1125 7y agoThe prices can increase for any labor or material costs for both manufacturing and transit. If you can prove that your increased prices are due to increased costs you can raise prices as much as you wish. The only thing this prevents is increased profit in times of crises.
- WalterBright 7y agoPreventing increased profit means no increase in supply.