Here’s another letter to the Los Angeles Times:
Central to Michael Hiltzik’s case for government prohibitions on so-called “price gouging” in the wake of natural disasters is his assertion that high prices do nothing to attract into the devastated areas additional supplies of much-needed goods (“Memo to economists defending price-gouging in a disaster: It’s still wrong, morally and economically,” August 29). Specifically, Hiltzik writes that natural disasters are “not amenable to rapid-response by market forces. If there’s no physical way to get a new supply of bottled water into some part of Houston, then allowing unrestrained price increases won’t produce a larger supply.”
Well now. Here’s a quotation from today’s Wall Street Journal: “And many trucks that are available are being turned over to relief and rebuilding efforts. Wal-Mart Stores Inc. has sent more than 1,000 big rigs to hard-hit areas and evacuation centers, with most carrying water” (“Freight Companies Scramble to Reroute Goods in Wake of Harvey”).
Market forces and private initiative, it appears, are far more powerful than are the flinty imaginations of pundits.
Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030
(I thank Richard McKenzie for the pointer to the Wall Street Journal report. And as Richard asks in his e-mail to me: “I wonder how the columnist can morally justify shifting police from saving lives to controlling prices.” Indeed.)