Tuesday, May 04, 2010

What's Wrong With Price Gouging? Nothing!

"It never fails. No sooner does some calamity trigger an urgent need for basic resources than self-righteous voices are raised to denounce the amazingly efficient system that stimulates suppliers to speed those resources to the people who need them. That system is the free market’s price mechanism — the fluctuation of prices because of changes in supply and demand.

When the demand for bottled water goes through the roof — which is another way of saying that bottled water has become (relatively) scarce — the price of water quickly rises in response. That price spike may be annoying, but it’s not nearly as annoying as being unable to find water for sale at any price. Rising prices help keep limited quantities from vanishing today, while increasing the odds of fresh supplies arriving tomorrow."

~
Jeff Jacoby writing in today's Boston Globe about the latest calamity leading to charges of "price gouging": the massive pipe break that left dozens of Greater Boston towns without clean drinking water over the weekend.

MP: In response to the reports of "price gouging," Massachusetts Governor Deval Patrick said “There is never an excuse for taking advantage of consumers, especially not during times like this.’’ With this statement, the governor shows a fundamental lack of understanding about how markets works.


Sellers always try to take advantage of consumers, in the sense that they should always charge "whatever the market will bear," and this condition should prevail regardless of the circumstances, i.e. after a calamity or before a calamity. For example, thousands, if not millions, of goods are sold daily through Ebay auctions, and in each case the seller is getting a price that reflects "whatever the market will bear." And those market-determined prices don't depend on whether the auctions took place before, during, or after a natural disaster.

Each day about 15,000 homes are sold in the U.S., and in each case the homes sell for "whatever the market will bear," and it doesn't matter whether it's a seller's or buyer's market, whether it's the height of a real estate bubble or the bottom of a real estate bust, or whether it's right before, or right after, an earthquake, flood or hurricane. In some markets, sellers actually sell ("scalp") their homes for more than the list price, a clear case of taking advantage of desperate home buyers by "price gouging."

I'm very, very confident that the last time Governor Patrick personally sold one of his own homes, shares of stock, boats or paintings he sold his possessions for the highest price possible ("whatever the market would bear") and not a penny cheaper, and in the process did his very best as a seller in every transaction to "take advantage" of the buyer.

Just like an earthquake, hurricane, flood or massive price breaks don't change the fundamental laws of physics, gravity or aerodynamics, those disasters also don't change the basic laws of supply and demand. If sellers of bottled water in Boston are guilty of illegal "price gouging" for selling water at elevated market prices after a major disruption like a massive pipe break, then sellers of all products at all times are guilty of "price gouging." Sellers always charge "whatever the market will bear," and are always trying to "gouge" buyers to the maximum extent possible. To act any differently would be foolish and even disruptive to our economic system.

It's only in the fantasy world of politics that the "anointed elected officials" think they get to be the "price deciders," and determine if sellers are guilty of "price gouging," "ticket scalping," or "predatory pricing." In the real world of the marketplace it's much different and much more democratic - the impersonal market forces of supply and demand become the "price deciders," and we're all much better off with those market-determined prices than with the artificial prices determined by politicians and bureaucrats.

59 Comments:

At 5/04/2010 5:05 PM, Blogger ritcey said...

I've been taken aback by my city's apparent total inability to boil water. Bottles of water purchased this weekend: 0

 
At 5/04/2010 5:42 PM, Blogger OA said...

The comments on that article were completely predictable talk of unethical, taking advantage, stupidest article ever, etc.

Of course, the completely acceptable alternative is to boil the tap water to drink. This isn't even a real crisis. If they had to use bottled water to bathe and flush the toilet, then let's talk. I can't even remember how many times in my life some pipe has broken and we've been told to boil water here in Los Angeles, sometimes just for my neighborhood.

Other than the really cheap brands, bottled water already costs more than other drinks. Do they really drink so much water in Boston that $1 or $2 extra is going to bankrupt people?

 
At 5/04/2010 6:09 PM, Blogger Charles Platt said...

After a particularly severe hurricane in Florida a few years ago, an enterprising guy bought some generators at retail prices in a neighboring state, trucked them in, and resold them at a profit. He was of course arrested for "gouging." Too bad if you wanted to buy one of his generators.

 
At 5/04/2010 6:55 PM, Anonymous Benny The Man said...

Price gouging is an interesting topic.
Suppose a billionaire falls off of a cruise ship late at night, the two of you alone on the rear smoking deck. He begs you to throw a lifesaver circle. You agree, but only if he will agree to pay you $50 million. He agrees, you toss him the lifesaver.
Both sides benefit from this transaction, and both sides agreed to enter it of their own free will.
Was it price gouging? Unethical?

 
At 5/04/2010 7:27 PM, Blogger Mark J. Perry said...

Benny: I would call that a "voluntary market transaction."

 
At 5/04/2010 7:44 PM, Blogger LoneSnark said...

While it may be voluntary to charge a drowning man millions of dollars for rescue, English courts going back hundreds of years refuse to honor such contracts as unconscionable, even if agreed to. if I remember correctly, the tradition holds that in such times of time-is-of-the-essence bi-monopoly, the courts enforce a pricing rule of 10 times the common charge. The example was of a tugboat sailing out to one contracted job and coming across a boat in distress which it and only it can save. Well, if a tug would customarily charge a thousand dollars to go out and save a boat, then they can be paid ten thousand for the rescue.

Well, how much does it cost for someone to sail out into the pacific and pull someone from the water?

The case a bottled water does not meet the standard in any way: the demand was not time sensitive, you could buy water an hour later with little impact; neither was it a monopoly, as even during shortage conditions, bottled water is available elsewhere, unless the price controls hold, that is.

But the price controls do not hold, the market has adjusted. Street vendors already charged $2 for bottled water, and convenience stores charged $1.49. As the shortage hits, walmart at $0.69 will sell out and when they try to replenish their supplies, the will be outbid by convenience stores in nice neighborhoods which charge more and therefore can afford the now higher unregulated wholesale prices.

 
At 5/04/2010 8:26 PM, Anonymous DeeBee9 said...

Having lived in Florida through 5 hurricanes I know about "price gouging" and the laws that punish it. Yes, the Lowe's that I went to to buy a generator didn't "price gouge" one whit; that's why the several people ahead of me were each buying several units! Yessiree, no price gouging but tons of black market activity. I, on the other hand, just wasted my time because there were no generators to be had at any price. The problem with these laws is that they lead to the shelves being cleaned out almost instantly, reducing price competition to simple good timing. Simply ridiculous.

 
At 5/04/2010 9:55 PM, Anonymous Lyle said...

As LoneSnark points out price gouging has been immoral for a long time Thomas Aquinas regarded it as immoral. Thus because at the time the state and the church were one it became illegal in England. (13th century). Recall at the time Christians were not allowed to charge interest either.
This exposes another issue, the divide between morality and economics, many do not regard the free market as the epitimy of morality, indeed its clear that most traditions would not hold it so. (Short of John Calvin). There is an element of "fairness" that also showed up in the Goldman hearings last week that people have a sense of what they regard as fair, and its not always the market. Many regard gouging as taking advantage of a person in a needy circumstance and view it the same as passing by on the other side in the tale of the Good Samaritan. Others viewing the market as the ultimate good clearly have the other view.

 
At 5/04/2010 10:28 PM, Blogger LoneSnark said...

I think the old rule is a fine rule. Price gouging laws should be changed to prohibit prices in excess of 10 times the usual price. But I suspect such a law would almost never find use.

An even better idea, of course, would be to repeal to price gouging laws and just leave the conscionable rules in place.

 
At 5/04/2010 10:50 PM, Anonymous Anonymous said...

The medieval solution to clean drinking water was beer. And we call it the dark ages.

 
At 5/04/2010 10:56 PM, Anonymous Anonymous said...

Was it price gouging? Unethical?


Yes, because you do not own the life saver to sell.

It is purchased by the steamship company and funded as part of their overhead. Therefor it should be equally available to any passenger that needs it.

Then again, it probably would not be there absent Coast Guard regulations.

The high class passengers pay more for their cabin and a greater proportion of the overhead. But if they get saved by the life buoy, they probably have more to live for.

 
At 5/04/2010 11:06 PM, Anonymous Anonymous said...

You can generally buy a 5kw generator for around $600. That is a stable price and generally accepted.

You can get a used one that doesn't smoke yet for $300.

The guy who pays a premium at the height of the market is going to get burned later when he sells. The guy who could not compete with him or didn't get to Lowes early enough is going to lose some milk and raw chicken.

The eggs will keep for a month if you varnish the shells. Make some jerky.

Get over it.

 
At 5/04/2010 11:30 PM, Anonymous Titus Pullo said...

Shouldn't the good people of Massachusetts be keeping three days of emergency water on hand as per FEMA instructions for disaster kits? And since Massachusetts voters elect such big government advocates as Kennedy, O'Neill, Kerry, Frank, etc, you would think they always follow what the government says they should do.

Maybe the Governor should start spot inspections of all registered Democrats to put his foot on the neck of those who don't follow FEMA. Set up some snitch lines, too.

 
At 5/05/2010 6:37 AM, Anonymous geoih said...

Quote from Lyle: "This exposes another issue, the divide between morality and economics, many do not regard the free market as the epitimy of morality, indeed its clear that most traditions would not hold it so."

I think the more basic point is the difference between a voluntary market interaction and a coercive non-market one. Once government is involved, you no longer have a free market. Every interaction is tainted by coercion and force.

What sort of morality do you have if it is forced? There is no morality if the government is saying 'charge less for the sale of your property or we'll kill you'.

 
At 5/05/2010 10:15 AM, Anonymous Benny The Man said...

Dr. Perry: Interesting answer. You are ideologically consistent.

 
At 5/05/2010 10:27 AM, Blogger tom said...

interesting topic. I agree that the price will tend to the point of balance between supply and demand, so when supply is limited and the demand shoots up the price naturally will go up. People don't like to see something cheap like water shoot up 5x, 10x, 20x in a crisis - I think they want to see rationing like 2 cases per family max. But that is unenforcable, and what happens is vendors come in, buy some and then resell anyway at the high market price. I would rather have expensive water, but have it on the shelves so if someone really needs it and wants to pay for it, it is there for them.

 
At 5/05/2010 12:17 PM, Anonymous Anonymous said...

but have it on the shelves so if someone really needs it and wants to pay for it, it is there for them.

Assuming they are able to pay for it as much as the rich pay for it. If you cannot pay for it, then it is not really there when you really need it, is it?

borries

 
At 5/05/2010 12:20 PM, Anonymous Anonymous said...

Once government is involved, you no longer have a free market.,

How often do you go shopping in Mogadishu?

Once government is not involved, you likely have market failure.

 
At 5/05/2010 1:08 PM, Anonymous Tommy S. said...

Just like government forces workers to "gouge" business owners by making them pay a minimum wage. We should prosecute all those workers for taking advantage of business owners and making a scarce resource even harder to come by.

 
At 5/05/2010 3:12 PM, Anonymous Anonymous said...

Reputable firms don't price gouge, but instead hold price steady and ration among regular customers rather than charging temporarily higher prices at the cost of losing customers after the crisis. You will notice in the examples here, it is fly-by-night operators without reputations to maintain who take advantage of temporary demand increases, which is ok, but the incentives differ between the two groups of sellers.

 
At 5/05/2010 3:20 PM, Blogger OA said...

Anonymous said...
How often do you go shopping in Mogadishu?

Once government is not involved, you likely have market failure.


How has the market failed in Mogadishu and what would you have the government do? Price caps, food handling laws, product safety testing, child labor laws, minimum wages?

Somalia is a failed state that can't really keep order in it's own capital. It is not the lack of government intervention in commerce in Somali that is the problem, it is the rampant lawlessness and corruption.

If the government could maintain order and enforce laws, they wouldn't need to intervene at all for commerce to improve. The "intervention" required there is a level playing field, not some central authority making price decisions.

 
At 5/05/2010 3:41 PM, Blogger juandos said...

"English courts going back hundreds of years refuse to honor such contracts as unconscionable, even if agreed to"...

No wonder England is barely making it as Euro-third world country...

"Price gouging laws should be changed to prohibit prices in excess of 10 times the usual price"...

Hmmm, what makes that 'more moral' than say '100 times more'?

Its not like Snark might be advocating a position that I might be against but there are lots of folks who make similer arguments...

In catastrophic situations market forces work regardless of the ethics of people...

It would be like going to Jupiter and telling the planet it can't have gravity more than ten times earth normal...

Jupiter doesn't care and neither do catastrophes...

 
At 5/05/2010 4:04 PM, Blogger OA said...

Check this out. Concord, Mass. passed a law to ban bottled water completely in 2011. They're not sure if they can legally do this.

Note the date was April 30, before the pipe break near Boston. I wonder if some people's heads exploded trying to figure out if they're for the ban but have a problem with gouging.

http://www.thebostonchannel.com/news/23320994/detail.html

http://www.boston.com/news/local/massachusetts/articles/2010/05/01/concord_fires_first_shot_in_water_battle/

 
At 5/05/2010 4:24 PM, Anonymous Anonymous said...

It is not the lack of government intervention in commerce in Somali that is the problem, it is the rampant lawlessness and corruption.

This is like that famous guy pumping the toilets in the Woodstock movie. "It's not that we can't get ahead, we just can't keep up."

Rampant lawlessness and corruption IS the free market in Somalia, and it is going to take government intervention to fix it. If you ever found yourself in the middle of a free enterprise, the first thing you would buy would be a gun, too.

 
At 5/05/2010 4:42 PM, Blogger juandos said...

"If you ever found yourself in the middle of a free enterprise, the first thing you would buy would be a gun, too"...

And the problem is what?

So what you seem to be saying is that its O.K. for the government to steal from people using the threat of incarceration and or violence but no one else can, did I get that right?

I've been to both downtown Mog and downtown Philly, I'd rather take my chances in Mog...

For those champions of interventionist government and open borders: Here's how the Suns can avoid being called hypocrites: Don't man the arena gates & whoever sneaks in w/out a ticket gets to stay

 
At 5/05/2010 4:53 PM, Anonymous Anonymous said...

"The "intervention" required there is a level playing field, not some central authority making price decisions."

This part we agree on. Now, how do you know when you have a level playing field? When you have an interest group screaming bloody murder that they are being robbed, how do you know, sight unseen, if they are in Mogadishu or Wall Street?

A level playing field means no one is worse off as the result of actions by others, or if they are, they can be compensated. How do you figure out what fair compensation is? Figure out what it is they think they have been cheated of and make it property which can be bought and sold.


The problem with the free market model as generally applied is that it is binary. Society is a many body problem. In a free market, you and I make a deal, the hell with society. Hence the black market / reputable dealer problem noted above.

 
At 5/05/2010 5:00 PM, Anonymous Anonymous said...

And the problem is what?

There is no problem wih that: an orderly militia etc.

Since we are all about equal rights and equal protection and a level playing field, you won't mind if the guy on the other side of the market table has a gun, too. You might complain if his was bigger and faster than yours.

But by breaking out the guns you are calling for, or establishing your own, government by force no different from the one often complained about.

You need government to enfoorce an orderly market, and that is going to affect prices.

 
At 5/05/2010 5:03 PM, Anonymous Anonymous said...

I've been to both downtown Mog and downtown Philly, I'd rather take my chances in Mog...

I presume you are in neither Philly nor Mogadishu now?

 
At 5/05/2010 6:08 PM, Blogger juandos said...

"I presume you are in neither Philly nor Mogadishu now?"...

This is correct but consider this, I'm near downtown St. Louis, Mo...

Google that lovely paradise?

Consider perusing Forbes magazine article: In Pictures: America's 10 Most Miserable Cities

No. 10 St. Louis, Mo.
The Gateway City scored in the bottom half of all nine categories we looked at for the Forbes Misery Measure. It was the only metro area to pull off that feat...

 
At 5/05/2010 6:14 PM, Blogger juandos said...

"Since we are all about equal rights and equal protection and a level playing field, you won't mind if the guy on the other side of the market table has a gun, too. You might complain if his was bigger and faster than yours"...

'level playing field'?!?!

ROFLMAO!

You really don't have a clue do you?

"But by breaking out the guns you are calling for, or establishing your own, government by force..."...

Yes but its MY government, not someone else's...

"You need government to enfoorce an orderly market, and that is going to affect prices"...

Yeah, that's exactly what we need, people who do a real bang up job watching over that market...

Sheesh!

 
At 5/05/2010 9:28 PM, Anonymous Anonymous said...

Calm down Juandos or you will blow

 
At 5/05/2010 11:49 PM, Blogger Ron H. said...

>"many do not regard the free market as the epitimy of morality"

Lyle -

Markets are not sentient beings, and don't have morals, any more than a building has morals. People do have morals, and you may judge whether you think a person is acting morally.

In a case like that of DeeBee9 above, is it more moral to charge a higher price when need is high and supply limited, or more moral to charge the same regular price, thereby ensuring that supply will be quickly exhausted, so that many will go without?

In DeeBee9's case, he might have been able to buy a generator if Lowe's had been able to raise their price.

If prices are allowed to rise when need is higher, the market will make it more likely that those who feel their need is great enough to justify the higher price, will get whqt they need.

 
At 5/06/2010 12:01 AM, Blogger Ron H. said...

Dr. Perry - you said -

"In response to the reports of "price gouging," Massachusetts Governor Deval Patrick said “There is never an excuse for taking advantage of consumers, especially not during times like this.’’ With this statement, the governor shows a fundamental lack of understanding about how markets works."

I used to think that politicians were either stupid or liars. I no longer think they are stupid.

It's possible that Gov. Patrick knew full well how markets work, but realized that he would gain more political capital by making the ignorant but emotionally satisfying statement he did, rather that speaking economic truth.

 
At 5/06/2010 12:08 AM, Blogger Ron H. said...

>"Check this out. Concord, Mass. passed a law to ban bottled water completely in 2011. They're not sure if they can legally do this."

How far the people of Concord have fallen! From defending their liberties through armed resistance to British troops in 1775, to meaningless insanity like this.

 
At 5/06/2010 12:18 AM, Blogger Ron H. said...

>"Maybe the Governor should start spot inspections of all registered Democrats to put his foot on the neck of those who don't follow FEMA. Set up some snitch lines, too."

These are great ideas! I'm surprised such a program isn't in place in MA.

A program in public schools encouraging kids to inform on their scofflaw parents would go a long way toward insuring full compliance also.

 
At 5/06/2010 12:46 AM, Blogger Ron H. said...

>"Assuming they are able to pay for it as much as the rich pay for it. If you cannot pay for it, then it is not really there when you really need it, is it?"

Ah, there it is! Class envy raises its ugly head.

Anon, the rich, being thrifty folks, will likely buy less water than they might at a lower price, thereby leaving more on the shelf for others. They know that soon, water will return to its low everyday price, so they need not stock up. Clear headed thinking like that is how they became rich.

Keep in mind, that the greedy ogre of a storekeeper isn't likely to raise his prices so high that people CAN'T buy, or his whole plan to rake in "unconscionable windfall profits" will be defeated.

For the truly poor, I suppose several families could pool their meager resources to buy one bottle of water that they could then share amongst them.

I must not get out enough, but isn't there ANY way to get water to drink except to buy it in bottles at the store? I'll have to ask my parents about this. I'm pretty sure they survived for many years without ever buying bottled water.

 
At 5/06/2010 1:04 AM, Blogger Ron H. said...

ANON @ 12:30

>"How often do you go shopping in Mogadishu?

Once government is not involved, you likely have market failure."


No, not really. Life here might be a little rough by our standards, but the market functions pretty well.

 
At 5/06/2010 10:19 AM, Anonymous Anonymous said...

Thank you for the citation which upports my argument.

The Xeer provides a rule of law — customary law, that is — permitting safe travel, trade, marriage, and so forth throughout the region.

......First, law and, consequently, crime are defined in terms of property rights. The law is compensatory rather than punitive. Because property right requires compensation, rather than punishment, there is no imprisonment, and fines are rare. Such fines as might be imposed seldom exceed the amount of compensation and are not payable to any court or government, but directly to the victim.

........................

Several extended families make up a jilib, which is the group responsible for paying the blood price in the event a member kills someone of another jilib or clan.



The blood price is similar to our concept of Statistical Value of a Human Life. apparently they don;t seem to hae a problem setting the value for this, but it is a major problem for us in setting the appropriate levels of regulation / compensation to prevent / repay crimes against property.

However thereis nothing here to refute my argument that without government intervention you have market failure. Infact they specifically have this form of government to protect the market so that it can function, and function in a way that does not allow asymmetric crimes against property.

 
At 5/06/2010 10:24 AM, Anonymous Anonymous said...

If you cannot pay for it, then it is not really there when you really need it, is it?"

My comment wasn't about wealth or class it was merely an observation of the unstated assumptions, without which the idea that the water would be there when really needed was unsubstantiated and unwarranted.

 
At 5/06/2010 3:49 PM, Blogger juandos said...

"Calm down Juandos or you will blow"...

Calm down?!?!

I was laughing so hard I could barely type...

 
At 5/06/2010 11:36 PM, Blogger Ron H. said...

Anon @10:19

>"However thereis nothing here to refute my argument that without government intervention you have market failure."

You didn't have anything that rose to the level of an argument, you merely made this baseless statement:

>"How often do you go shopping in Mogadishu?

Once government is not involved, you likely have market failure."


Your inference here is that government is not involved in Mogadishu, and that it exemplifies a likely failed market.

The citation I provided you shows that not to be the case, which you now claim was your argument all along.

You can't argue both sides of this, bub.

If you wish to support your initial statement, you need to present an example of a failed market caused by lack of government involvement.

This time you will have to find something on your own.

 
At 5/07/2010 12:04 AM, Blogger Ron H. said...

Anon @ 10:24

>"My comment wasn't about wealth or class..."

Bullshit!

As soon as you said this -

>"Assuming they are able to pay for it as much as the rich pay for it."

-you have described two classes of people. Those who can afford to buy water, and those who can't.

If you are going to make statements like the above, you need to defend them if you can. Don't just say: "Oh, I didn't say that.". Be consistent.

 
At 5/07/2010 11:20 AM, Anonymous Anonymous said...

-you have described two classes of people. Those who can afford to buy water, and those who can't.


How is decribing two classes of people taking sides?

Simply saying that the market will provide water when you really need it, is avoiding a certain reality.

If you ever experiene tht reality, then youwill learn that it is not bullshit.

You claim the market will provide water when you really eed it and I say that isn't true, necessarily.

How does the market provide water to someone who cannot compete well enough to pay for it?

In the natural world the lion gets the water and the gazelle dies. Later the elephant gets the water and drives off the lion. Some enterprising gazelle now sees a niche market an dashes for quick drink. But there is no guarantee that water will be there when you need it, uless you can afford to pay.

One way or another. As a society (or as individuals) we have to ask how long we are willing to hold our nose and scramble over dead gazelles to get to the water.

That is part of the price you pay, too.

 
At 5/07/2010 11:49 AM, Anonymous Anonymous said...

"How often do you go shopping in Mogadishu?

Once government is not involved, you likely have market failure."

Your inference here is that government is not involved in Mogadishu, and that it exemplifies a likely failed market.


And you responded with an example that shows there is limited government in Mogadishu, imposed specifically to make the market work.

We are no longer arguing about wheter some kind of government is necessary, but what is optimum.

I submit that Mogadishu has less government and less market activity than New York.

If your argument is that the less government the better, then I'm not so sure. I'd like to see a more nuanced model - one that does not EXCLUDE the possibility that the best markets are supported by the least government.

My observation is that my TOTAL cost is going to include some market inefficiencies and some government inefficincies, and that one frequently but not always offsets the other.

I'm looking for lowest total cost, regardless of ideology.

 
At 5/07/2010 11:51 AM, Anonymous Anonymous said...

Bullshit.

I just thought I'd thrw that in to make my argument stronger. It seems to be obligatory around here.

 
At 5/07/2010 12:28 PM, Blogger Michael said...

The anything is OK between two consenting adults and a derivatives contract argument should feel a little frayed right now, even to an economist. With "externalities" we recently experienced including 10s of millions of jobs lost, and the "externalities" that were avoided by government action including way more jobs lost and way more bankruptcies, it would seem at least a nod to explaining how the vast commercial law that already governs the "free" market has no place in emergency situations.

 
At 5/07/2010 1:30 PM, Blogger Ron H. said...

Anon @11:20

Slow down! You're typing too fast. Try proofreading your comments before hitting the publish button.

You might also try reading more slowly so that comprehension won't be left so far behind.

Where to start? You're creating strawmen so fast, it's hard to keep up.

I believe the point of this post is that when something is in short supply, a higher price for that something, causes a more equitable distribution of that something, by prolonging the availability of that something, and encourages those who resupply that something to work harder at providing more of it quickly.

In this instance, we have been discussing water, but the principle holds for anything that is not in unlimited supply.

I don't see in the post, or in any of the comments, any discussion of guarantees of availability. One of your many strawmen.

>"How is decribing two classes of people taking sides?"

No one has mentioned taking sides. Another strawman.

>"Simply saying that the market will provide water when you really need it..."

No one has said that. Read more slowly and carefully. How many strawmen is that? I'm losing count.

>"You claim the market will provide water when you really eed it"

I haven't claimed that, nor has anyone else. Reread the comments. Select "comprehension = on".

>"How does the market provide water to someone who cannot compete..."

The market doesn't. This is not a function of markets. Family, friends, neighbors, community, and now even the state will provide someone with water if they cannot provide it for themself. There is no longer any need to compete. Ain't that great?

>"...natural world...lions...niche market...dead gazelles...blah blah blah..."

What a bizarre and imaginative story! It has no relevance to a discussion of price gouging, so why did you include it?

>"As a society (or as individuals) we have to ask..."

Oh, here we go: the "We Must..." assertion.

You collectivists are so predictable. You squirm and start spouting gibberish when you don't have substantive arguments.

 
At 5/07/2010 1:41 PM, Anonymous Anonymous said...

I'm anti partisan and I'm not selling anything.

You made an argument that I think is weak and i said why.

I'm not asking you to change our argument, nor do I expect to win mine. You can either improve your argument or call me an idiot, whatever you think wil get your candidate(a) the most votes.

Despiete what you think we do have a society and a government that makes some kinds of collective decions. [We can] assume that they are always wrong, or [we can] propose and institute better and more accurate methods for ensuring that we get better ones and less waste.

That sentence is the same in the collective as in the singular, so attacking the word "we" has zero argumentative value.

 
At 5/07/2010 1:43 PM, Anonymous Anonymous said...

Slow down! You're typing too fast. Try proofreading your comments before hitting the publish button.

I apologize. Try not to let the typing interfere with the thoughts.
Then try typing with a tongue depressor.

 
At 5/07/2010 1:46 PM, Anonymous Anonymous said...

I believe the point of this post is that when something is in short supply, a higher price for that something, causes a more equitable distribution of that something, by prolonging the availability of that something, and encourages those who resupply that something to work harder at providing more of it quickly.

I did not disaree with that. I disagreed with the contentionthat this system makes sure that water is there when you need it.

You are creatng a straw man by diverting from the point.

 
At 5/07/2010 1:49 PM, Anonymous Anonymous said...

I don't see in the post, or in any of the comments, any discussion of guarantees of availability. One of your many strawmen.



but have it on the shelves so if someone really needs it and wants to pay for it, it is there for them.


what do you call that?

 
At 5/07/2010 1:53 PM, Anonymous Anonymous said...

"How does the market provide water to someone who cannot compete..."

The market doesn't. This is not a function of markets.


So the market is an incomplete answer. What do we call a system that endeavors to provide lowest total cost for all the things that need to be done that market does not do?

 
At 5/07/2010 1:58 PM, Anonymous Anonymous said...

Family members. You are suggesting a cost shifting externality that represents a market failure.

We each have a family member who cannot afford water. For me he is a cousin twice removed. For you he is a cousin three times removed.

Why is he my problem any more than yours? How does you solution provide lowest total cost?

 
At 5/07/2010 2:34 PM, Anonymous Anonymous said...

"Assuming they are able to pay for it as much as the rich pay for it. If you cannot pay for it, then it is not really there when you really need it, is it?"

Ah, there it is! Class envy raises its ugly head.



I did not bring up the class argument. My only comment was the availability issue and the apparent assumptions behind it.

 
At 5/07/2010 2:42 PM, Anonymous Anonymous said...

Juandos is a lot of fun. We should capture hima as a new energy source: just push the right buttons and watch him explode mindlessly.


'level playing field'?!?!

ROFLMAO!

You really don't have a clue do you?

"But by breaking out the guns you are calling for, or establishing your own, government by force..."...

Yes but its MY government, not someone else's...



Somebody mind explaining to me waht ROFLMAO is and waht class of argumentation it falls in?

At least now when Juandos goes off about liberals wanting to control everything we can understand that he is not about equal liberties for all, but only control and universal liberty for himself.

He'll make about as fine a king as his namesake, and his ideas come out of the 15th century as well.

 
At 5/07/2010 2:50 PM, Anonymous Anonymous said...

"...natural world...lions...niche market...dead gazelles...blah blah blah..."

What a bizarre and imaginative story! It has no relevance to a discussion of price gouging, so why did you include it?


Reductio ad absurdium. It represents a real life example of a water market without government intervention.

On the one hand reductio ad aburdium is a logical fallacy, onthe other hand it is a key part of the scientific method: propose a hypothesis [Markets do better without government intervention] proceed logically from there until you find a contradiction. If you find it the hypothesis is wrong.

The converse is Sherlock holmes statement that however implausible this answer is, it must be correct if you have excluded every other.

With respect to Juandos it illustrates what happens when the lion comes to the table with a gun and the elephant later comes with a bigger one.

I'm only sorry you thought it was "inventive".

 
At 5/07/2010 2:58 PM, Anonymous Anonymous said...

...but have it on the shelves so if someone really needs it and wants to pay for it, it is there for them..

I'm still waiting for a substantive argument as to why this assertion is not partially incorrect.

One that does not involve a personal attack.


I'm standing in a store, I reaally need some water, I really want to pay for it. I have no money.

How is it that the water is there for me?

Now remember, the lead in is that "I would rather have expensive water on the shelf..."


Who is the elitist, me or the author of that sentence?


hint: I support the idea of free and open markets, and I see nothing wrong with price gouging.

 
At 5/07/2010 5:15 PM, Blogger juandos said...

"With respect to Juandos it illustrates what happens when the lion comes to the table with a gun and the elephant later comes with a bigger one"...

Still whining anon...

Get a grip on reality lad, it'll do you good...

 
At 5/09/2010 1:43 AM, Anonymous Anonymous said...

Who is whining? I have no complaints. All I did was point out waht I thought was some pretty flaccid argument.

Juandos has no arguments to disagree with, only aimless and baseless ad nominems.

Like his namesake, he can't be bothered to engage.

 

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