5 ms·

Maybe I'm misunderstanding your point, but your first sentence seems completely illogical. If there is a fixed supply of water, what better mechanism than pric

by liber8 14y ago

Maybe I'm misunderstanding your point, but your first sentence seems completely illogical. If there is a fixed supply of water, what better mechanism than price exists to efficiently determine the best use of that water? Not allowing people to raise prices means you end up with wildly inefficient allocation of resources (i.e. first guy in line says, "Man, there's a remote chance this flooding lasts for 2 weeks. Water is the same price it was pre-hurricane? I'll take all you've got.") Similarly, not allowing people to raise prices actually decreases supply. If you remember post-Katrina, there were numerous "anti-price gouging" orders enacted. The result? All the people who were willing to drive a truck full of generators (and plywood, and water, etc. etc.) 1000 miles to make a few bucks/hundred bucks profit per unit now had no incentive to do so. And so they didn't. And the people of New Orleans suffered needlessly.

pavel_lishin 14y ago
As I recall, authorities turned away anyone trying to make a quick buck by selling essential supplies. Even with fixed prices, there was a limited number of goods. Driving a truck there to unload your wares still made economic sense, if you could do it at a large enough scale.
- liber8 14y ago
  God forbid people be allowed to voluntarily exchange their money for essential supplies! Snark aside, whether it made economic sense or not was up to those people to decide. Clearly, it didn't make economic sense for people to drive 1000 miles to sell generators at cost, because people stopped doing it once they weren't allowed to profit. Posters upstream discuss rationing, which never works well either. It still ends up in an inefficient distribution of resources. This is logical. How can the person doing the rationing possibly know how much water each of 300,000 individuals needs? Maybe I have a bunch at home and don't need any, whereas my neighbor needs extra because he's severely dehydrated. Whenever rationing occurs, there is always increased corruption and graft, and a market for the coupons (or whatever tally method is chosen) always arises anyway.
  - pavel_lishin 14y ago
    > Clearly, it didn't make economic sense for people to drive 1000 miles to sell generators at cost, because people stopped doing it once they weren't allowed to profit. I literally thought they weren't letting anyone into the Katrina-damaged areas, whether they were trying to gouge people, or just sell necessary supplies, or even give them away for free. I understand their rationalization - how do you tell a do-gooder from a looter? And even if you can prove they're a do-gooder, how do you know they won't fall victim to crime, and become another casualty for you to worry about? But I do disagree with it.
barrkel 14y ago
The correct response to a fixed supply of water is rationing, not either fixed or floating prices. Because without water you die, or catch diseases from poor substitutes. With a fixed price, whoever comes in first gets the most water; laggards die. With a floating price, whoever has the most money gets the most water; poor people die. Neither of these is morally superior. IMO.
- jlgreco 14y ago
  I suspect water could be considered a special case, since it is so immediately necessary. What if, instead, we were talking about bread? Assuming that rich people are fairly rare, then raising the price of bread high enough to be expensive but not so high that people cannot pull enough cash out of their pocket to pay for it, then the effect seems to me like it should be an approximation of a ration. Clearly if Donald Trump gets to the store first and buys all the bread then nobody else would have any, but he could do that no matter the price. So long as the price is painful but feasible for anyone to afford, everything should work out more or less okay. If the price is so high that nobody but Donald Trump can afford the bare minimum necessary, then there is certainly an issue, but I suspect raising prices that high would not be very effective.
  - eru 14y ago
    Even water is not a special case. If you want to help people, give them extra cash. (There might be some justification for putting in some extra-windfall tax, though. I am not sure.)
  - fr0sty 14y ago
    But water is not really a special case, though. Tap water is nearly free and bottled water is >$1/gal. so the markup during a disaster is >100x.
    - jlgreco 14y ago
      I only consider water a (potential) special case because it is one of the few things that, in the event that it really is unavailable, people will start dropping dead pretty quick. Bread, fuel, generators, etc... these are all things we can afford to be relatively dismissive of and just say that price caps are unneeded/bad. That may also be the case with water, but I don't feel comfortable saying that with my limited knowledge.

by liber8 14y ago

pavel_lishin 14y ago

As I recall, authorities turned away anyone trying to make a quick buck by selling essential supplies. Even with fixed prices, there was a limited number of goods. Driving a truck there to unload your wares still made economic sense, if you could do it at a large enough scale.

liber8 14y ago
God forbid people be allowed to voluntarily exchange their money for essential supplies! Snark aside, whether it made economic sense or not was up to those people to decide. Clearly, it didn't make economic sense for people to drive 1000 miles to sell generators at cost, because people stopped doing it once they weren't allowed to profit. Posters upstream discuss rationing, which never works well either. It still ends up in an inefficient distribution of resources. This is logical. How can the person doing the rationing possibly know how much water each of 300,000 individuals needs? Maybe I have a bunch at home and don't need any, whereas my neighbor needs extra because he's severely dehydrated. Whenever rationing occurs, there is always increased corruption and graft, and a market for the coupons (or whatever tally method is chosen) always arises anyway.
- pavel_lishin 14y ago
  > Clearly, it didn't make economic sense for people to drive 1000 miles to sell generators at cost, because people stopped doing it once they weren't allowed to profit. I literally thought they weren't letting anyone into the Katrina-damaged areas, whether they were trying to gouge people, or just sell necessary supplies, or even give them away for free. I understand their rationalization - how do you tell a do-gooder from a looter? And even if you can prove they're a do-gooder, how do you know they won't fall victim to crime, and become another casualty for you to worry about? But I do disagree with it.

barrkel 14y ago

The correct response to a fixed supply of water is rationing, not either fixed or floating prices. Because without water you die, or catch diseases from poor substitutes. With a fixed price, whoever comes in first gets the most water; laggards die. With a floating price, whoever has the most money gets the most water; poor people die. Neither of these is morally superior. IMO.

jlgreco 14y ago
I suspect water could be considered a special case, since it is so immediately necessary. What if, instead, we were talking about bread? Assuming that rich people are fairly rare, then raising the price of bread high enough to be expensive but not so high that people cannot pull enough cash out of their pocket to pay for it, then the effect seems to me like it should be an approximation of a ration. Clearly if Donald Trump gets to the store first and buys all the bread then nobody else would have any, but he could do that no matter the price. So long as the price is painful but feasible for anyone to afford, everything should work out more or less okay. If the price is so high that nobody but Donald Trump can afford the bare minimum necessary, then there is certainly an issue, but I suspect raising prices that high would not be very effective.
- eru 14y ago
  Even water is not a special case. If you want to help people, give them extra cash. (There might be some justification for putting in some extra-windfall tax, though. I am not sure.)
- fr0sty 14y ago
  But water is not really a special case, though. Tap water is nearly free and bottled water is >$1/gal. so the markup during a disaster is >100x.
  - jlgreco 14y ago
    I only consider water a (potential) special case because it is one of the few things that, in the event that it really is unavailable, people will start dropping dead pretty quick. Bread, fuel, generators, etc... these are all things we can afford to be relatively dismissive of and just say that price caps are unneeded/bad. That may also be the case with water, but I don't feel comfortable saying that with my limited knowledge.