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That’s what I don’t understand about the argument against price gouging. Fresh water is hard to come by, ergo the price goes up. If the product wasn’t in dema
by cwilkes 6y ago
That’s what I don’t understand about the argument against price gouging. Fresh water is hard to come by, ergo the price goes up.
If the product wasn’t in demand it wouldn’t go up in price. By artificially forcing a low price it guarantees there’s going to be shortages.
By allowing the price to go up it will also enforce people use water wisely. That is they won’t start taking showers or watering plants with bottled water as it will be expensive.
- jariel 6y agoWhen the price of water spikes: + Some people in need are priced-out, which is very bad. + Many for whom the price isn't really a problem given it's become a 'health issue' will stock up dramatically, further driving prices up and hoarding from others. The 'shortage' FYI is probably inherent in a flood type situation. By far a better solution is rationing, which is exactly what is done in these situations and has been for quite some time. Rationing can be enforced at the point of sale i.e. 'Max 3 per household', definitely through social conditioning, i.e. making sure community members are aware of the need to do this, much like mask-wearing and social distancing, and possibly through more specific measures, i.e. 'ration cards'. The immediate problem with rationing maybe 'lineups' which is the visual epitome that many people like to point to from the Soviet Era as an example of 'bad economics' from centrally planned economies, and it surely is in the long run, but in the short-run, i.e. in disaster type scenarios, rationing is often a very obvious and useful strategy.