8 ms·

When there is huge demand for a product prices go up. Then the people who really need it will still be able to buy it. This is a good feature of markets.

mienski 6y ago
TIL price gouging of medical supplies during pandemics is a good feature of markets..
- vmception 6y ago
  When an emergency lasts a few weeks in a limited area you can curb a market, and indeed this is what legislatures across the country and world had rationally prepared their jurisdictions to do When an emergency is endless with all hope for resolution being a complete lie due to not having a plan, needing to placate the population longer and not having data to create a plan all while the scope of the emergency is expanding, a market has to continue functioning as normal with its primary feature being to signal to people - yes, even middlemen - that their ability to source and/or create supply is worth their time and energy as opposed to doing literally anything else Thats what happened Some jurisdictions created novel more holistic solutions by shielding the consumers from price shocks by the government absorbing/subsidizing the price over a floor. It was foolish of representatives to try to use their existing tools of short term price controls as if a storm just hit a small area of their state, as this just caused confusion and made the market more opaque.
  - musicale 6y ago
    > It was foolish of representatives to try to use their existing tools of short term price controls as if a storm just hit a small area of their state, as this just caused confusion and made the market more opaque. I'm still unconvinced that price gouging during an emergency is beneficial overall. Regardless, it was already illegal in California.
    - vmception 6y ago
      Actually it wasn’t, all PPE could be sourced and sold at prices that matched their scarcity and utility, which is my point about why this belief in price gouging restrictions just caused confusion. There is a way they couldnt, it was very hard to do that. The legal reality was more nuanced than the governor, legislature and DA ever imagined because prior emergencies were never larger than an isolated area. This market distortion covered the entire state indefinitely and crossed state lines, their power was much more limited than they imagined. They thought the federal government was going to solve this for the states and were wrong and this cost the states months, especially California due to its size and population, which is still realigning and adjusting to self-autonomy and procurement while being ahead of many other states.
  - mola 6y ago
    But the scarcity was hand made, "entrepreneurs" would buy all stock to create scarcity in order to gouge prices. This is what free markets enable, in times of pandemic this is unacceptable.
    - nickpp 6y ago
      Other entrepreneurs would see the gouged prices and will do the impossible to find and add new stock on the market. That is what the free markets enable, and that is why they are even more important during pandemics and other crises.
      - La1n 6y ago
        > do the impossible to find and add new stock on the market. Sure, but that does take time, during which hospital stuff and immunocompromised people don't have masks.
        imtringued 6y ago
        Yes but if you do the "obvious" thing of adding a maximum price then not only did you fail to accomplish anything (messing with prices doesn't create more masks out of thin air), you even declared the problem solved so nobody else can attempt a solution!
        vmception 6y ago
        It's an ecosystem, a market, there is no one single actor to point to. People couldn't sit on stock for very long because other people were flooding the market as fast as they could. There was simply scarcity and that's it. State's had their procurement and price enforcement procedures all wrong while they sat idly for the Federal Government to procure for them, it never happened and that is what cost the most time. The better version of events was that states assumed this level of autonomy at the very beginning and ramped up their own domestic production back in January. They created credits for this kind of production in the private sector, while also subsidizing a retail cost above a certain price, creating a ceiling for consumers. None of this happened and this affected the medical workers and immunocompromised greater than any entrepreneur hoarder could.
mullingitover 6y ago
Not when it's a price shock, supply isn't able to respond to price signals in a timely fashion, and the increased prices are purely lining the pockets of middle men.
- tupputuppu 6y ago
  Without high price there would be no incentive for suppliers to rampa up supply, work over time and build new manufacturing capacity.
  - lopmotr 6y ago
    High prices also discourage some frivolous wasteful panic buying. People are going to miss out no matter what, but at least with price gouging, there's some sorting related to need, even if it's imperfect.
  - TeMPOraL 6y ago
    Manufacturers aren't stupid and don't do impulse response. If they can tell the price shock is likely transient - that the demand will evaporate before they'll manage to ramp up production - then they won't even bother.
    - sokoloff 6y ago
      If they knew that every decade or so, they might temporarily be able to sell at 5x the normal price for 3 months, they’d likely run their outbound supply chain slightly less just-in-time. Ironically, this might make things less likely to get to the point where the market price was 5x normal.
      - def_true_false 6y ago
        They run them less just-in-time that you think, e.g. 3M were able to double production in a couple of months [1]. I'd say that's pretty impressive, but what do I know. Regardless, preparing for these events is the government's job, including stockpiling the required PPE. In fact, in a bunch of countries the stockpiles were scaled down or simply never replenished because it was deemed an unnecessary expense (France, Belgium, Canada). [1] https://www.startribune.com/3m-s-complicated-road-to-enough-n95-capacity-took-many-hands/569929962/ https://www.startribune.com/3m-s-complicated-road-to-enough-...
skipnup 6y ago
With face masks, the people who need them and the people who have lots of money are not the same group of people
- tupputuppu 6y ago
  Face masks cost 20 cents per mask. I'm sorry but this is a topic you can't just make to be about income inequality
  - kevingadd 6y ago
    N95 masks are currently at least $2 USD/mask on Home Depot's website, and they've never been cheaper than that when I've bought some. Who's your supplier for this budget PPE? Medical workers and the immuno-compromised would love to buy from them.
    - daniellarusso 6y ago
      Where are you finding these $2 n95 masks in stock? I have been unable to purchase them from Home Depot or Lowes. The most recent price I have seen is $5 per mask in a twenty pack. The highest I have seen so far this year, was $18 per mask.
    - kube-system 6y ago
      Do you have a link? I'd love to buy some, but when I apply the n95 filter, all 12 results are out of stock.
- barumi 6y ago
  You're talking about supply shortages as if it was a permanent thing. If after all these months you're still seeing a shortage in face masks then I regret to inform you that your market is not free, nor is your economy operating accordig to basic capitalism principles.
  - ClumsyPilot 6y ago
    'capitalism principles' are not a religious teaching, lets discuss facts on the ground For N95 respirators you need meltblown, a material that most countries do not produce, and the equipment to make it has lead time of a year in mormal times. Masks that are now filling shelves are, for the most park, just BS. They are not actual respirators.
rendall 6y ago
I heard it explained this way: in a war zone or disaster area it's risky to even have a market, so prices will rise very high. This is good. If prices were kept artificially low, by price-gouging laws for example, then there would be no market at all, as the risk would not be worth it High prices during the pandemic slows hoarding, and is a signal to producers that there is high demand. When production ramps up to meet demand, prices will lower. This is the situation now. Price-gouging laws encourage hoarding: the first person in line gets to buy everything at artificially low prices. Now they have to make other laws to limit purchases. Now people who need to buy for a large family or community can't buy enough. Now the needs to be another law allowing exceptions....
- newsbinator 6y ago
  It's possible to prevent price gauging and mitigate hoarding. Say by tying purchases to your ID, so each individual pays a fair price but only gets to purchase n items per t time.
  - rocqua 6y ago
    That still doesn't encourage supply to increase much. I would advocate for both. Let prices rise, and ration items
    - wtallis 6y ago
      > That still doesn't encourage supply to increase much. If you aren't sufficiently incentivized to increase production by knowing you're now guaranteed that every piece you produce will sell at the everyday price, as quickly as you can ship it, then it doesn't seem like your everyday price was rational to begin with. In such circumstances, I don't think it's safe to assume that adding steep price gouging will produce any marginal increase in the likelihood of a producer increasing production, on top of whatever production increases are already going to happen just as a result of instantly selling out of all existing stock. But all that is assuming the gouging happens at the production end of the supply chain. If the gouging is happening at the penultimate step of the supply chain and the profits mostly don't make it back to the manufacturer, then price gouging can't do much to incentivize higher production.
mdoms 6y ago
Religious fanatic.

mienski 6y ago

TIL price gouging of medical supplies during pandemics is a good feature of markets..

vmception 6y ago
When an emergency lasts a few weeks in a limited area you can curb a market, and indeed this is what legislatures across the country and world had rationally prepared their jurisdictions to do When an emergency is endless with all hope for resolution being a complete lie due to not having a plan, needing to placate the population longer and not having data to create a plan all while the scope of the emergency is expanding, a market has to continue functioning as normal with its primary feature being to signal to people - yes, even middlemen - that their ability to source and/or create supply is worth their time and energy as opposed to doing literally anything else Thats what happened Some jurisdictions created novel more holistic solutions by shielding the consumers from price shocks by the government absorbing/subsidizing the price over a floor. It was foolish of representatives to try to use their existing tools of short term price controls as if a storm just hit a small area of their state, as this just caused confusion and made the market more opaque.
- musicale 6y ago
  > It was foolish of representatives to try to use their existing tools of short term price controls as if a storm just hit a small area of their state, as this just caused confusion and made the market more opaque. I'm still unconvinced that price gouging during an emergency is beneficial overall. Regardless, it was already illegal in California.
  - vmception 6y ago
    Actually it wasn’t, all PPE could be sourced and sold at prices that matched their scarcity and utility, which is my point about why this belief in price gouging restrictions just caused confusion. There is a way they couldnt, it was very hard to do that. The legal reality was more nuanced than the governor, legislature and DA ever imagined because prior emergencies were never larger than an isolated area. This market distortion covered the entire state indefinitely and crossed state lines, their power was much more limited than they imagined. They thought the federal government was going to solve this for the states and were wrong and this cost the states months, especially California due to its size and population, which is still realigning and adjusting to self-autonomy and procurement while being ahead of many other states.
- mola 6y ago
  But the scarcity was hand made, "entrepreneurs" would buy all stock to create scarcity in order to gouge prices. This is what free markets enable, in times of pandemic this is unacceptable.
  - nickpp 6y ago
    Other entrepreneurs would see the gouged prices and will do the impossible to find and add new stock on the market. That is what the free markets enable, and that is why they are even more important during pandemics and other crises.
    - La1n 6y ago
      > do the impossible to find and add new stock on the market. Sure, but that does take time, during which hospital stuff and immunocompromised people don't have masks.
      - imtringued 6y ago
        Yes but if you do the "obvious" thing of adding a maximum price then not only did you fail to accomplish anything (messing with prices doesn't create more masks out of thin air), you even declared the problem solved so nobody else can attempt a solution!
      - vmception 6y ago
        It's an ecosystem, a market, there is no one single actor to point to. People couldn't sit on stock for very long because other people were flooding the market as fast as they could. There was simply scarcity and that's it. State's had their procurement and price enforcement procedures all wrong while they sat idly for the Federal Government to procure for them, it never happened and that is what cost the most time. The better version of events was that states assumed this level of autonomy at the very beginning and ramped up their own domestic production back in January. They created credits for this kind of production in the private sector, while also subsidizing a retail cost above a certain price, creating a ceiling for consumers. None of this happened and this affected the medical workers and immunocompromised greater than any entrepreneur hoarder could.

mullingitover 6y ago

Not when it's a price shock, supply isn't able to respond to price signals in a timely fashion, and the increased prices are purely lining the pockets of middle men.

tupputuppu 6y ago
Without high price there would be no incentive for suppliers to rampa up supply, work over time and build new manufacturing capacity.
- lopmotr 6y ago
  High prices also discourage some frivolous wasteful panic buying. People are going to miss out no matter what, but at least with price gouging, there's some sorting related to need, even if it's imperfect.
- TeMPOraL 6y ago
  Manufacturers aren't stupid and don't do impulse response. If they can tell the price shock is likely transient - that the demand will evaporate before they'll manage to ramp up production - then they won't even bother.
  - sokoloff 6y ago
    If they knew that every decade or so, they might temporarily be able to sell at 5x the normal price for 3 months, they’d likely run their outbound supply chain slightly less just-in-time. Ironically, this might make things less likely to get to the point where the market price was 5x normal.
    - def_true_false 6y ago
      They run them less just-in-time that you think, e.g. 3M were able to double production in a couple of months [1]. I'd say that's pretty impressive, but what do I know. Regardless, preparing for these events is the government's job, including stockpiling the required PPE. In fact, in a bunch of countries the stockpiles were scaled down or simply never replenished because it was deemed an unnecessary expense (France, Belgium, Canada). [1] https://www.startribune.com/3m-s-complicated-road-to-enough-n95-capacity-took-many-hands/569929962/ https://www.startribune.com/3m-s-complicated-road-to-enough-...

skipnup 6y ago

With face masks, the people who need them and the people who have lots of money are not the same group of people

tupputuppu 6y ago
Face masks cost 20 cents per mask. I'm sorry but this is a topic you can't just make to be about income inequality
- kevingadd 6y ago
  N95 masks are currently at least $2 USD/mask on Home Depot's website, and they've never been cheaper than that when I've bought some. Who's your supplier for this budget PPE? Medical workers and the immuno-compromised would love to buy from them.
  - daniellarusso 6y ago
    Where are you finding these $2 n95 masks in stock? I have been unable to purchase them from Home Depot or Lowes. The most recent price I have seen is $5 per mask in a twenty pack. The highest I have seen so far this year, was $18 per mask.
  - kube-system 6y ago
    Do you have a link? I'd love to buy some, but when I apply the n95 filter, all 12 results are out of stock.
barumi 6y ago
You're talking about supply shortages as if it was a permanent thing. If after all these months you're still seeing a shortage in face masks then I regret to inform you that your market is not free, nor is your economy operating accordig to basic capitalism principles.
- ClumsyPilot 6y ago
  'capitalism principles' are not a religious teaching, lets discuss facts on the ground For N95 respirators you need meltblown, a material that most countries do not produce, and the equipment to make it has lead time of a year in mormal times. Masks that are now filling shelves are, for the most park, just BS. They are not actual respirators.

rendall 6y ago

I heard it explained this way: in a war zone or disaster area it's risky to even have a market, so prices will rise very high. This is good. If prices were kept artificially low, by price-gouging laws for example, then there would be no market at all, as the risk would not be worth it High prices during the pandemic slows hoarding, and is a signal to producers that there is high demand. When production ramps up to meet demand, prices will lower. This is the situation now. Price-gouging laws encourage hoarding: the first person in line gets to buy everything at artificially low prices. Now they have to make other laws to limit purchases. Now people who need to buy for a large family or community can't buy enough. Now the needs to be another law allowing exceptions....

newsbinator 6y ago
It's possible to prevent price gauging and mitigate hoarding. Say by tying purchases to your ID, so each individual pays a fair price but only gets to purchase n items per t time.
- rocqua 6y ago
  That still doesn't encourage supply to increase much. I would advocate for both. Let prices rise, and ration items
  - wtallis 6y ago
    > That still doesn't encourage supply to increase much. If you aren't sufficiently incentivized to increase production by knowing you're now guaranteed that every piece you produce will sell at the everyday price, as quickly as you can ship it, then it doesn't seem like your everyday price was rational to begin with. In such circumstances, I don't think it's safe to assume that adding steep price gouging will produce any marginal increase in the likelihood of a producer increasing production, on top of whatever production increases are already going to happen just as a result of instantly selling out of all existing stock. But all that is assuming the gouging happens at the production end of the supply chain. If the gouging is happening at the penultimate step of the supply chain and the profits mostly don't make it back to the manufacturer, then price gouging can't do much to incentivize higher production.

mdoms 6y ago

Religious fanatic.