in praise of price gouging

you may not like the laws of economics, but the are called “laws” and not “suggestions” for a reason.

if demand is constant and supply drops, then all else equal, price will rise.

some like to call this “price gouging” and cite examples like "charging double for bottled water after a hurricane” but this misses the larger point: it is not gouging, it is reflective of simple economic processes at work and the higher price has several beneficial effects:

  1. it discourages hoarding

  2. it encourages more supplies to be produced or sent to the area

  3. it incentivizes those who can do without to forgo consumption

  4. it incentivizes those with surplus to make it available

  5. it leads to allocation of scare resource toward greatest need

one can always find fault in specific outcomes, but this is true of any economic system or system of allocation. let’s consider, for example, not raising prices despite reduced supply:

oops, look, runs on gas stations!

people hoarded!

and now cannot get any at any price.

perhaps rather than being thankful no one price gouged and vilifying any who would suggest such a course, we should be asking, if prices had jumped to $5 or $7 a gallon, would we have gasoline available right now instead of a complete absence?

would the world have flocked to fill tanks and jerrycans and spare vehicles?

would the people who really need gasoline today be able to get some?

if gas prices in the east and south are the same as in the west, there’s no point in shipping gas from the west to the south. but if they are higher, then it does. you can pay to ship, still make extra money, and mitigate the shock because… wait for it… you have incentive to do so.

price and profit are incentives. break that structure and do not act surprised when your market graunches.

price rises responsive to supply and demand conditions are not gouging. that’s just a loaded epithet used by the economically illiterate to substitute emotional thinking for rational.

won’t this be fun when some ambulance company has to suspend service because they are out of dinosaur juice?

(coming soon to a hospital near you)

the alternative to higher price in a supply shock is not “we all get some at low prices,” it’s “the market runs out of stuff.”

the only other option is “some regulator limits purchase quantity” which just makes the market twice as stupid and wasteful before it runs out of stuff. the lines get longer, you have to go buy at 4 places instead of one, etc.

“price gouging” is really “market adaptation” and if you prevent it, well, you’ve earned a broken market. so let’s remember that.

while i’m up on my soapbox du jour, let’s also speak of the other hilarity emerging from stupid long term policies and positions here.

watching politicians cast around for solutions and blame is fun. even the normally wonderful desantis is getting this one wrong.

the reality is this: we’re in this mess because both the left and the right pushed us here through regulation and the prevention of market development.

  • watching the right, who has steadfastly opposed strong encryption and real infosec for decades because “then how can we spy on the terrorists?” suddenly get the vapors every time the weak informational security ecosystem they so love gets hacked BY the terrorists (or the data thieves) has the same genuine feel of crocodile tears.

  • watching the left, who has so steadfastly opposed building new pipelines that would add capacity and redundancy by yelling “eco-NIMBY!!” at anything that looks like it could carry fuel suddenly act baffled that “what, we don’t have another way to get gasoline to market here?!?” is like watching the same guys that oppose freeway construction wonder why they’re stuck in traffic.

welcome to the urkelocracy.

i hope you have enough gas in the tank to make it home from it.