More on Responses to COVID-19

by Don Boudreaux on March 24, 2020

in Current Affairs, Intervention, Prices, Reality Is Not Optional, Regulation, Risk and Safety, Seen and Unseen, The Future

My intrepid Mercatus Center colleague Veronique de Rugy and I have a new op-ed that went out last night over the Tribune’s wire service. Our essay is on responses to the outbreak of coronavirus. Here’s a slice:

But to improve people’s material well-being requires also that any increased production be of goods and services that are of the most use to people. It would be wasteful to use resources in ramping up production of cruise ships and karaoke machines rather than of more desperately needed hospital beds and food. Income earned at work is valuable only if it can be spent on things that income earners most want.

Unfortunately, government efforts to stop so-called “price gouging” reduce the production of goods and services that people want the most in times of emergency. By preventing prices from reflecting just how desperate consumers are for the likes of hand sanitizer, canned goods and fresh milk, anti-price-gouging measures thwart consumers’ ability to obtain the real goods and services that would do them and their families the most good.

Finally, there’s this reality, one that’s especially easy to lose sight of during emergencies: Today’s response to the current crisis will affect how people prepare for, and respond to, future crises.

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