7 ms·

It's very interesting to me that (nearly) everyone agrees that reselling disaster supplies like masks, hand sanitizer, etc. for a large profit is terrible, but

by patmcc 7y ago

It's very interesting to me that (nearly) everyone agrees that reselling disaster supplies like masks, hand sanitizer, etc. for a large profit is terrible, but somehow selling literal essentials like food, housing, and healthcare for profit is just fine.

hartator 7y ago
Maybe free circulation of good and services are a good thing.
- deleted 7y ago
  [deleted]
- stronglikedan 7y ago
  But it's never truly free, since someone will have paid for it at some point. Essential goods and services should be made freely available to those who need them, and are in a lot of places.
Alkhwarizmi 7y ago
You just said the keyword...”resell” vs “well”! The difference between immoral opportunist and opportunists is vast.
duxup 7y ago
Is the bar "large profit" or is there more too it? I think there is more than "large profit" at work here when people talk about disaster profiteers.
- adventured 7y ago
  > I think there is more than "large profit" at work here when people talk about disaster profiteers. There is a critical other element: some reasonable equality of distribution of supplies in emergencies. The persons selling at a large profit are distributing gear to those who can pay the most, which inherently leaves those to drown that can't compete on price. In an emergency like this, ideally per capita NYC should get the same supplies as Buffalo NY (or Detroit, or Baltimore), assuming they are hit similarly per capita by the virus, despite NYC being far wealthier and able to outbid on gear. Properly in an emergency like this, a life in Detroit should have the same value as one in NYC. Rich vs poor distribution is questionable in a game like Major League Baseball, big market teams vs small market teams, and it's morally horrendous to observe when it's poorer people (and healthcare systems) in Buffalo competing versus richer people in NYC for medical gear (not meant to represent an actual scenario playing out now). That's of course very hard to level as a playing field, unless it's the Federal Government stepping in and doing the leveling to ensure some equality of supplies.
taneq 7y ago
What's being decried here is reselling essential disaster supplies at a large profit, not just being part of a supply chain. The key words are 'essential disaster supplies' (ie. things that we suddenly have a large inelastic demand for) and 'at a large profit' (ie. taking advantage of an adverse situation to price gouge). Your local supermarket making 30% on loaves of bread isn't doing either of these things. Healthcare is the closest to fitting the bill, if we're talking about the U.S., and you guys should look into that even without a pandemic as impetus.
intopieces 7y ago
There's a temporal aspect that your comparison misses. That is, after the disaster is done, re-selling supplies like masks, hand sanitizer, etc for a large profit will be just fine. Profits incentivize risk and innovation.
creddit 7y ago
The difference, generally, is who the gains go to. Societally, we want there to be an incentive and reward to those who will produce the things we need so that they get produced. Giving gains to hoarders who artificially lower supplies and then resell when disasters spike demand does nothing beneficial for society. It's rent seeking at its worst. As an expansion on this, the thing you should _really_ be upset with is people who own land and get massive returns on it. Land's value rarely has anything to do with the owners of the land. Note that I'm speaking of the value of the raw land and not any structure built on top of it. With land ownership, especially in a place like the SFBA, huge economic gains have gone to people who have done nothing than own something and vote down housing. The broad point of all of this is that society should be structured in a way that rewards act as incentives to people to create more benefit to others. That's the core idea behind an Adam Smith type capitalism.
- perceptronas 7y ago
  I think you are missing the point about housing. Quite the opposite if I understand what you are suggesting. The main problem is that somebody who doesn't own your land can say what you can build or cannot. That's why developers cannot build housing. From that perspective, best incentive would be to leave the housing development for markets instead of politicians. Now politicians with town's majority favor can decide who benefits making it non-fair for the minority of voters. About Tokyo housing development deregulation and its impacts [0] [0] - https://www.wsj.com/articles/what-housing-crisis-in-japan-home-prices-stay-flat-11554210002 https://www.wsj.com/articles/what-housing-crisis-in-japan-ho...
  - creddit 7y ago
    I don't think you understood what I was suggesting since I agree with what you're saying. The land owners (majority not developers) have made it such that building is impossible which greatly increases the value of their property by lowering supply from a natural state.
mywittyname 7y ago
The economy needs to have good sold at a profit. It seems to be the best way to ensure that people, as a group, make and sell the things that need to be made and sold, and in appropriate quantities. It's not perfect, as there are plenty of inefficiencies, but it's a very good model. There are a number of problems with price gouging. First, it isn't helpful, everyone already knows there's a shortage of critical supplies, and increasing the price by several multiples isn't going to help make more products faster. Second, it encourages bubbles. People will begin to purchase items that are in short supply specifically to resell them later at a higher price. This actively prevents critical supplies from reaching people in a timely fashion, which can and does result in preventable deaths. Third, it threatens social stability in stressful times. The people hording supplies are at risk of causing violent encounters with those who need them. And a shootout or riot is the last thing we need right now. Overall, I think it's pretty easy to see why people oppose price gouging. I'm honestly surprised anyone would defend such actions.
- chillacy 7y ago
  The tie to bubbles is important. Nobody who pumps and dumps a stock actually believes in the long term prospects of the business, and so we've labeled that kind of trading illegal in the stock market. This is pretty similar to pumping and dumping a stock.
- ccmcarey 7y ago
  > The economy needs to have good sold at a profit Not for things that do not need to make a profit. See: essentials like healthcare, housing, and basic food items.
  - Nerevarine76 7y ago
    Why would anyone work to acquire, sell, and as a result create a competitive market for those items if they can't make any money off of it? Preventing sellers from profiting off of 'essentials' and setting prices has created some of the worst food shortages in history.
    - 7y ago
kaitai 7y ago
Yep. The flaws of that system are becoming clearer and clearer, not that you'd see it from the responses you're getting. "If people can't pay for housing, they deserve to be homeless! If people can't pay for healthcare, they deserve to be sick and die! Without a profit motive, we cannot do anything for our fellow man! It would be immoral to serve without profit, or to look for the greater profit to society!" Housing first strategies in homelessness have been shown to save money on emergency services and healthcare, but we believe, in the US, that it's immoral to help people who can't pay up. We know the cost of everything and the value of nothing.
- sparkie 7y ago
  Who is "we?" I have a question, if you don't mind answering. What are you doing personally to help the homeless and less fortunate than yourself? I get that it is easy to sit behind a keyboard and complain that other people aren't doing enough. The way to help people isn't to demand that other people pay more, but to use your own resources for the causes which are most important for you. Simply giving more money to the state solves nothing. It just makes the state bigger, more corrupt and less efficient. The resources get diverted to other goals which don't match up with your own. Perhaps it would be better to keep more of your hard earned money so that you can utilize it as you feel most appropriate? Relevant?: https://i.imgur.com/MogFw59.jpg https://i.imgur.com/MogFw59.jpg It seems to me that the flaws aren't with the system, but with people who idly sit and wait for things to improve at the cost of someone else (the "rich people" scapegoat). Your time is often more valuable than money to those in need. Why don't you give up more of your time to help people. Perhaps quit your job and become a full time altruist? Look, nobody "deserves to be homeless," but nor does anybody "deserve to be homed at the cost of somebody else's labour" Nobody "deserves to be sick," but also nobody "deserves to have healthcare given to them without compensating the healthcare giver for their time". It isn't "immoral to help people who can't pay" at all, but it isn't "moral to steal other people's property to pay to help others" either. You seem to have a cartoon world view in which everyone should be in prosperity by default - but the reality is that poverty is the default state of all of humanity, and the only way that humans have ever lifted themselves out of poverty is through productive labour and innovation. If you are not productive and you can't innovate, you are not entitled to the successes of those who are. This might seem a bit cold-hearted, but the people who are in the best position to help others are those who are not spending every hour of every day undergoing basic survival. People have a self-interest to look after themselves and their families first - and then once they've secured that goal, can begin to look how they can help others less close to them. The simple fact is that the vast majority of humans are in the category of figuring out how their own family is going to survive month to month, and the less fortunate are simply just that. You can't help everyone. You have limited capacity as a human, and the most effective way you can help anybody is to secure the well-being of yourself and your family so that you have excess resources and time to dedicate to helping others. If your economic output is limited, your time dedicated to helping people directly is infinitely more valuable than your time campaigning for more socialism.
closeparen 7y ago
Suppose a farmer or a developer relinquishes his handsome profits by switching to less efficient techniques. Or the price of one of his inputs sharply rises, and he doesn't have the market power to pass it on. Now he only makes a narrow living. Has the world become a better place?
- Der_Einzige 7y ago
  Yes, because the marginal utility gained by the people who don't have to pay extra for products during a crisis is significantly more than the marginal utility lost by a (comparatively wealthy) farmer or developer. Remember that most farming done today is factory farming by big shots. Same with property or business development.
  - closeparen 7y ago
    >don't have to pay extra I think we agree that consumer prices are important. The point of this example is to compare two situations where the prices to the consumer are the same, and only the profit differs, to tease out whether profit really matters.
amiga_500 7y ago
Landlords remove supply the add it back in for a premium. They are the hand sanitizer guy.
Spooky23 7y ago
There’s a difference between making a profit where market forces and utility drive pricing and profiteering where some temporary situation disrupts the market. The exception is healthcare, which I believe the current for profit model is unethical and immoral.
dahart 7y ago
I’m decidedly not in the camp who believe that the free market will magically solve everything. However, there is a big difference between needing disaster supplies immediately and the long-term stable markets for food and housing. The difference is time, how fast the demand changes. The arguments in favor of no regulation are that supply and demand will eventually balance at the place that is “optimal”, or least bad for everyone. Healthcare is and always will be especially problematic for dogmatic proponents of free market policy, but food in general seems to work reasonably well because the overall demand doesn’t change suddenly or dramatically. With today’s need for disaster supplies, demand is many orders of magnitude higher than normal, and by the time supply can meet the demand, the demand is going to disappear. Price gouging of emergency supplies in this case is taking advantage of a huge discrepancy between demand and supply, and this discrepancy doesn’t exist globally for food & housing - it might vary locally, but there’s almost unlimited amounts of competition, unlike N95 mask production. So that’s why it might not be so inconsistent to be okay with making food profits but not with disaster supply price gouging.
outlace 7y ago
I don't think the price is the problem. I couldn't get toilet paper for a week, not because some enterprising con-man had purchased it all and was selling it for 10x as much outside my door, but because ordinary folk at the tail of the distribution bought it all at its normal (low) price and we temporarily ran out of supply. What we needed was immediate rationing policies, the price was never the problem. Stores eventually ended up self-initiating individual buying limits but this was well after all the initial supply dried up. In fact, if all prices were immediately responsive to local supply/demand, this likely would have effectively resulted in a rationing policy. If the unit price of toilet paper at my local CVS was in part a function of the remaining supply at the local store, as one person attempted to buy all of it, the unit price would soar, effectively preventing them from doing so unless they're a millionaire and prepared to spend thousands of dollars on toilet paper. Indeed, one can easily make an argument for stronger market forces to solve this problem. That existing markets for common goods are too poorly responsive to supply and demand and that the local supply/demand signals are ignored and only national signals are accounted for. But also, simple rationing would have worked too.
- dehrmann 7y ago
  Toilet paper is interesting because the home and commercial markets are separate, so while overall demand remained similar, demand for the home product massively exceeded supply.
Barrin92 7y ago
Policies on for-profit healthcare vary widely. if anything the consensus among the developed world is socialized or non-profit systems with private markets playing a supplemental rather than primary role. Housing is more mixed, but some of the most liveable places like Vienna or Singapore have heavily regulated or socialised housing sectors. So I think there is more variance on essential goods than you imply. The general advantage of markets is rational distribution of goods through the mechanism of the price signal. in emergency situations, there isn't really a lot of price finding we need to do. We know where markets need to go (hospitals) and we need to produce significantly more than we realistically even can right now.
scooble 7y ago
It is also interesting how morality scales. Presumably, when things get back to normal it will still be moral to exploit one family's crisis for profit (or 100, or 1000). But now we've hit a certain number of families the same activity becomes morally wrong.
qnsi 7y ago
Economists dont agree with you. https://www.econlib.org/archives/2017/09/a_poll_of_econo.html https://www.econlib.org/archives/2017/09/a_poll_of_econo.htm...

by patmcc 7y ago

hartator 7y ago

Maybe free circulation of good and services are a good thing.

deleted 7y ago
[deleted]
stronglikedan 7y ago
But it's never truly free, since someone will have paid for it at some point. Essential goods and services should be made freely available to those who need them, and are in a lot of places.

Alkhwarizmi 7y ago

You just said the keyword...”resell” vs “well”! The difference between immoral opportunist and opportunists is vast.

duxup 7y ago

Is the bar "large profit" or is there more too it? I think there is more than "large profit" at work here when people talk about disaster profiteers.

adventured 7y ago
> I think there is more than "large profit" at work here when people talk about disaster profiteers. There is a critical other element: some reasonable equality of distribution of supplies in emergencies. The persons selling at a large profit are distributing gear to those who can pay the most, which inherently leaves those to drown that can't compete on price. In an emergency like this, ideally per capita NYC should get the same supplies as Buffalo NY (or Detroit, or Baltimore), assuming they are hit similarly per capita by the virus, despite NYC being far wealthier and able to outbid on gear. Properly in an emergency like this, a life in Detroit should have the same value as one in NYC. Rich vs poor distribution is questionable in a game like Major League Baseball, big market teams vs small market teams, and it's morally horrendous to observe when it's poorer people (and healthcare systems) in Buffalo competing versus richer people in NYC for medical gear (not meant to represent an actual scenario playing out now). That's of course very hard to level as a playing field, unless it's the Federal Government stepping in and doing the leveling to ensure some equality of supplies.

taneq 7y ago

What's being decried here is reselling essential disaster supplies at a large profit, not just being part of a supply chain. The key words are 'essential disaster supplies' (ie. things that we suddenly have a large inelastic demand for) and 'at a large profit' (ie. taking advantage of an adverse situation to price gouge). Your local supermarket making 30% on loaves of bread isn't doing either of these things. Healthcare is the closest to fitting the bill, if we're talking about the U.S., and you guys should look into that even without a pandemic as impetus.

intopieces 7y ago

There's a temporal aspect that your comparison misses. That is, after the disaster is done, re-selling supplies like masks, hand sanitizer, etc for a large profit will be just fine. Profits incentivize risk and innovation.

creddit 7y ago

The difference, generally, is who the gains go to. Societally, we want there to be an incentive and reward to those who will produce the things we need so that they get produced. Giving gains to hoarders who artificially lower supplies and then resell when disasters spike demand does nothing beneficial for society. It's rent seeking at its worst. As an expansion on this, the thing you should _really_ be upset with is people who own land and get massive returns on it. Land's value rarely has anything to do with the owners of the land. Note that I'm speaking of the value of the raw land and not any structure built on top of it. With land ownership, especially in a place like the SFBA, huge economic gains have gone to people who have done nothing than own something and vote down housing. The broad point of all of this is that society should be structured in a way that rewards act as incentives to people to create more benefit to others. That's the core idea behind an Adam Smith type capitalism.

perceptronas 7y ago
I think you are missing the point about housing. Quite the opposite if I understand what you are suggesting. The main problem is that somebody who doesn't own your land can say what you can build or cannot. That's why developers cannot build housing. From that perspective, best incentive would be to leave the housing development for markets instead of politicians. Now politicians with town's majority favor can decide who benefits making it non-fair for the minority of voters. About Tokyo housing development deregulation and its impacts [0] [0] - https://www.wsj.com/articles/what-housing-crisis-in-japan-home-prices-stay-flat-11554210002 https://www.wsj.com/articles/what-housing-crisis-in-japan-ho...
- creddit 7y ago
  I don't think you understood what I was suggesting since I agree with what you're saying. The land owners (majority not developers) have made it such that building is impossible which greatly increases the value of their property by lowering supply from a natural state.

mywittyname 7y ago

The economy needs to have good sold at a profit. It seems to be the best way to ensure that people, as a group, make and sell the things that need to be made and sold, and in appropriate quantities. It's not perfect, as there are plenty of inefficiencies, but it's a very good model. There are a number of problems with price gouging. First, it isn't helpful, everyone already knows there's a shortage of critical supplies, and increasing the price by several multiples isn't going to help make more products faster. Second, it encourages bubbles. People will begin to purchase items that are in short supply specifically to resell them later at a higher price. This actively prevents critical supplies from reaching people in a timely fashion, which can and does result in preventable deaths. Third, it threatens social stability in stressful times. The people hording supplies are at risk of causing violent encounters with those who need them. And a shootout or riot is the last thing we need right now. Overall, I think it's pretty easy to see why people oppose price gouging. I'm honestly surprised anyone would defend such actions.

chillacy 7y ago
The tie to bubbles is important. Nobody who pumps and dumps a stock actually believes in the long term prospects of the business, and so we've labeled that kind of trading illegal in the stock market. This is pretty similar to pumping and dumping a stock.
ccmcarey 7y ago
> The economy needs to have good sold at a profit Not for things that do not need to make a profit. See: essentials like healthcare, housing, and basic food items.
- Nerevarine76 7y ago
  Why would anyone work to acquire, sell, and as a result create a competitive market for those items if they can't make any money off of it? Preventing sellers from profiting off of 'essentials' and setting prices has created some of the worst food shortages in history.
  - 7y ago

kaitai 7y ago

Yep. The flaws of that system are becoming clearer and clearer, not that you'd see it from the responses you're getting. "If people can't pay for housing, they deserve to be homeless! If people can't pay for healthcare, they deserve to be sick and die! Without a profit motive, we cannot do anything for our fellow man! It would be immoral to serve without profit, or to look for the greater profit to society!" Housing first strategies in homelessness have been shown to save money on emergency services and healthcare, but we believe, in the US, that it's immoral to help people who can't pay up. We know the cost of everything and the value of nothing.

sparkie 7y ago
Who is "we?" I have a question, if you don't mind answering. What are you doing personally to help the homeless and less fortunate than yourself? I get that it is easy to sit behind a keyboard and complain that other people aren't doing enough. The way to help people isn't to demand that other people pay more, but to use your own resources for the causes which are most important for you. Simply giving more money to the state solves nothing. It just makes the state bigger, more corrupt and less efficient. The resources get diverted to other goals which don't match up with your own. Perhaps it would be better to keep more of your hard earned money so that you can utilize it as you feel most appropriate? Relevant?: https://i.imgur.com/MogFw59.jpg https://i.imgur.com/MogFw59.jpg It seems to me that the flaws aren't with the system, but with people who idly sit and wait for things to improve at the cost of someone else (the "rich people" scapegoat). Your time is often more valuable than money to those in need. Why don't you give up more of your time to help people. Perhaps quit your job and become a full time altruist? Look, nobody "deserves to be homeless," but nor does anybody "deserve to be homed at the cost of somebody else's labour" Nobody "deserves to be sick," but also nobody "deserves to have healthcare given to them without compensating the healthcare giver for their time". It isn't "immoral to help people who can't pay" at all, but it isn't "moral to steal other people's property to pay to help others" either. You seem to have a cartoon world view in which everyone should be in prosperity by default - but the reality is that poverty is the default state of all of humanity, and the only way that humans have ever lifted themselves out of poverty is through productive labour and innovation. If you are not productive and you can't innovate, you are not entitled to the successes of those who are. This might seem a bit cold-hearted, but the people who are in the best position to help others are those who are not spending every hour of every day undergoing basic survival. People have a self-interest to look after themselves and their families first - and then once they've secured that goal, can begin to look how they can help others less close to them. The simple fact is that the vast majority of humans are in the category of figuring out how their own family is going to survive month to month, and the less fortunate are simply just that. You can't help everyone. You have limited capacity as a human, and the most effective way you can help anybody is to secure the well-being of yourself and your family so that you have excess resources and time to dedicate to helping others. If your economic output is limited, your time dedicated to helping people directly is infinitely more valuable than your time campaigning for more socialism.

closeparen 7y ago

Suppose a farmer or a developer relinquishes his handsome profits by switching to less efficient techniques. Or the price of one of his inputs sharply rises, and he doesn't have the market power to pass it on. Now he only makes a narrow living. Has the world become a better place?

Der_Einzige 7y ago
Yes, because the marginal utility gained by the people who don't have to pay extra for products during a crisis is significantly more than the marginal utility lost by a (comparatively wealthy) farmer or developer. Remember that most farming done today is factory farming by big shots. Same with property or business development.
- closeparen 7y ago
  >don't have to pay extra I think we agree that consumer prices are important. The point of this example is to compare two situations where the prices to the consumer are the same, and only the profit differs, to tease out whether profit really matters.

amiga_500 7y ago

Landlords remove supply the add it back in for a premium. They are the hand sanitizer guy.

Spooky23 7y ago

There’s a difference between making a profit where market forces and utility drive pricing and profiteering where some temporary situation disrupts the market. The exception is healthcare, which I believe the current for profit model is unethical and immoral.

dahart 7y ago

I’m decidedly not in the camp who believe that the free market will magically solve everything. However, there is a big difference between needing disaster supplies immediately and the long-term stable markets for food and housing. The difference is time, how fast the demand changes. The arguments in favor of no regulation are that supply and demand will eventually balance at the place that is “optimal”, or least bad for everyone. Healthcare is and always will be especially problematic for dogmatic proponents of free market policy, but food in general seems to work reasonably well because the overall demand doesn’t change suddenly or dramatically. With today’s need for disaster supplies, demand is many orders of magnitude higher than normal, and by the time supply can meet the demand, the demand is going to disappear. Price gouging of emergency supplies in this case is taking advantage of a huge discrepancy between demand and supply, and this discrepancy doesn’t exist globally for food & housing - it might vary locally, but there’s almost unlimited amounts of competition, unlike N95 mask production. So that’s why it might not be so inconsistent to be okay with making food profits but not with disaster supply price gouging.

outlace 7y ago

I don't think the price is the problem. I couldn't get toilet paper for a week, not because some enterprising con-man had purchased it all and was selling it for 10x as much outside my door, but because ordinary folk at the tail of the distribution bought it all at its normal (low) price and we temporarily ran out of supply. What we needed was immediate rationing policies, the price was never the problem. Stores eventually ended up self-initiating individual buying limits but this was well after all the initial supply dried up. In fact, if all prices were immediately responsive to local supply/demand, this likely would have effectively resulted in a rationing policy. If the unit price of toilet paper at my local CVS was in part a function of the remaining supply at the local store, as one person attempted to buy all of it, the unit price would soar, effectively preventing them from doing so unless they're a millionaire and prepared to spend thousands of dollars on toilet paper. Indeed, one can easily make an argument for stronger market forces to solve this problem. That existing markets for common goods are too poorly responsive to supply and demand and that the local supply/demand signals are ignored and only national signals are accounted for. But also, simple rationing would have worked too.

dehrmann 7y ago
Toilet paper is interesting because the home and commercial markets are separate, so while overall demand remained similar, demand for the home product massively exceeded supply.

Barrin92 7y ago

Policies on for-profit healthcare vary widely. if anything the consensus among the developed world is socialized or non-profit systems with private markets playing a supplemental rather than primary role. Housing is more mixed, but some of the most liveable places like Vienna or Singapore have heavily regulated or socialised housing sectors. So I think there is more variance on essential goods than you imply. The general advantage of markets is rational distribution of goods through the mechanism of the price signal. in emergency situations, there isn't really a lot of price finding we need to do. We know where markets need to go (hospitals) and we need to produce significantly more than we realistically even can right now.

scooble 7y ago

It is also interesting how morality scales. Presumably, when things get back to normal it will still be moral to exploit one family's crisis for profit (or 100, or 1000). But now we've hit a certain number of families the same activity becomes morally wrong.

qnsi 7y ago

Economists dont agree with you. https://www.econlib.org/archives/2017/09/a_poll_of_econo.html https://www.econlib.org/archives/2017/09/a_poll_of_econo.htm...