Ryan Bourne adds his wisdom to the debate over “price gouging.” Here’s his conclusion:
Hurricanes and natural disasters are destructive and lead to no good outcomes overall. But that does not mean we should throw out the price mechanism, which has important benefits in crises in terms of allocating scarce resources to those who value them most, and encouraging others to bring their goods to market.
I’d like to conclude with some remarks concerning, not LK’s particular arguments, but the presumption, implicit in most versions of the “state invention” hypothesis, that sovereigns are at least as capable as other persons, and perhaps more capable, of coming up with monetary innovations. Such a belief flies in the face of all experience. The story of money’s evolution — or that part of it concerning which we have certain knowledge — is, essentially, one of recurring private inventions followed, in many instances, by public appropriation of those inventions. It was not kings or governments but private-sector innovators who came up with manual screw presses, as alternatives to hammers, for striking coins, and with their later steam-driven and electrical counterparts. It was private goldsmiths, and not public bankers, who, in the west, issued the first banknotes. Private innovators also gave us the first lines of credit, the first clearinghouses, the first electronic payments (consisting of telegraphic wire transfers), the first credit and debit cards, the first ATMs, and, most recently, the first blockchain-based means of payment. Governments, in contrast, pioneered little, if anything. Instead, they observed what private markets did, and then stuck their mitts in, sometimes regulating, sometimes prohibiting, and sometimes nationalizing, private-sector innovations.