… is from my GMU Econ colleague Walter Williams’s April 1st, 2020, syndicated column titled “Managing a Disaster “:
Higher prices charged have a couple of unappreciated benefits. First, they get people to economize on the use of the good whose price has risen. That is higher prices reduce demand and encourage conservation. That helps with the disaster.
With higher prices, profit-seeking suppliers know that they can make more money by bringing additional quantities of the goods to the market. This increases the supply of goods, which helps to drive prices back down. Anti-price gouging laws disrupt these two very important functions of the marketplace and enhance and prolong a disaster. In other words, in a disaster, we want people to economize their use of goods and services and we want suppliers of these goods and services to produce more. Rising prices encourage these actions. Anti-price gouging laws stymy those incentives and create the pretense that a disaster does not exist.
DBx: Walter was born 84 years ago today. He’s still going strong. And the world has never needed his insight and courage as much as it does today.
Happy Birthday, my treasured colleague and dear friend.