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Big- and Ordinary-Sized Hearts

Here’s a letter to the Wall Street Journal:

Some letter-writers who criticize my defense of so-called “price gouging” mistakenly assume that I oppose charitable actions to help victims of natural disasters (Letters, Oct. 11).  In fact, I applaud any and all outpourings of such generosity.  To the extent that big-hearted people make available, at zero or very low prices, additional supplies of goods such as water and propane, the prices of these goods are kept from rising as high as they would rise without such generous giving.  This result is entirely commendable.

Yet the very fact that, with every natural disaster, prices of such goods nevertheless rise to levels higher than they were pre-disaster proves that the amounts of goods supplied charitably are insufficient to meet all of the victims’ needs at pre-disaster prices.  The resulting rise in prices, therefore, continues to serve the useful function of enticing those people with ordinary-sized hearts to work harder to bring much-needed supplies to the victims and to persuade the victims themselves not to use available supplies frivolously.

By all means, let’s encourage as much charity as we can.  But the happy reality that our world has in it many big-hearted people willing to charitably help others does not mean that we should therefore reject market mechanisms that pick up the slack left by the failure of charity to completely eliminate the harsh economic realities caused by natural disasters.

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


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