It's not very enlightening, all told, but there are a few things to note in this exchange on "price-gouging" during emergencies, between Objectivist philosopher Andrew Bernstein and Texas Attorney General Greg Abbot, available at msnbc.com.
First of all, consider what the host, Dan Abrams, seems to regard as a valid argument: we all know that "most people out there in the public are going to say it's a good thing that in particular instances that the government steps in and says we're not going to let them take advantage of the situation."
"Them," I guess, would be those all-powerful property owners. You know, those bastards who think they have rights to such esoteric values as "life, liberty, and the pursuit of happiness." Whose rights to said property are limited, of course, by eminent domain laws and, according to Mr. Abrams, "most people out there."
Bernstein responds, quite properly, that there's a moral point, that one may dispose of one's property according to one's own wishes, especially since the United States is not a dictatorship. That provo"kes Abrams into claiming that, in this country, "we generally have a free market system but we also have certain protections. The government gets involved in certain industries to try to make sure that things are in essence done more equitably and as a result, the market, the argument goes, ends up working better, more efficiently."
Interesting claim, that: "protections." Note that there seems to be more "protection" for consumers of property than for its producers. That bit about "equitably" will, I submit, not raise more than a few eyebrows across the land, yet what could be more equitable than paying for what you want?
Things get worse, though, when Greg Abbott, Texas Attorney General, joins the discussion. Somehow, he claims, "normal" economic laws "don't apply" during emergencies. Consider that we're talking about goods becoming scarcer and the prices for those goods going up. Doesn't that sound like supply and demand to you -- in other words, like economics?
Not good enough for an Attorney General, who -- as an attorney and therefore a member of a government-protected cartel -- certainly should have learned a thing or two by now about interfering in the workings of a free market. Oh no, not good enough at all:
The argument doesn't make sense. Obviously it's a theory. It's a theory that works in a macro context. It does not work in times of emergency. In times of emergency we as a country have an obligation to help take care of those who are most vulnerable. We are dealing with real-live people, not with theories. We are dealing with people who are trying to flee a very deadly hurricane....And they have to get out of the hurricane's way. In order to do so, they should not be bilked by price gougers.
Let's see now...prices are information, so as supply and demand works itself out, a decrease in supply coupled with an increase in demand should indicate that a certain commodity -- let us say gasoline, just for argument's sake -- is now more valuable, thereby motivating consumers to use less of it so as not to run out...and thereby motivating producers to charge more for each unit of that same commodity -- again, so as not to run out...and motivating other producers, until now outside that market, thus to enter said market, thereby increasing the supply of gasoline, thus lowering prices, thus bringing about an adjustment from an emergency situation back to normal...hmmm....and the role of bureaucrats (such as state attorneys general) in all of this, is...zero.
In other words, without price gougers, there would be no gasoline.
Posted by Craig Ceely at September 26, 2005 08:59 PM