Why is it a bad thing for a store to sell out if there will be more supplies soon?
There may not be more supply of some of what is needed soon, or "soon" may not be soon enough.
Also I'm not talking about the store selling out at some point, but it selling out with many would be customers left.
And you seem to feel it a bad thing if the seller doesn't maximize his or her profit.
Not at all, I have no major problem with sellers deciding to leave some profit on the table (esp. if they are selling to me <g>). I only have a problem with them being forced to do so.
Ok, then what do you mean, then? You seem to feel there is less suffering if enough people are priced out of the market to balance supply and demand. Or maybe that a person with more money suffers more acutely than someone who has less.
Neither.
In a condition of shortage some people aren't going to get the goods. Price doesn't perfectly allocate by need by a long shot, but its much better at doing so then random luck or political connections or other ways of allocating scarce goods. If the ice or gasoline is the normal pre-disaster price and I don't desperately need it, but am luck enough to be near the front of the line, my incentive is to take it, even if there are others who could possibly need it more than me. If it cost a lot more then normal I have an incentive not to buy it if I can do without it for a short time. So allocate the goods by price and even the current limited supply is likely to be more efficiently allocated, at least to a very small degree.
Now that might only be a minor factor, but its probably enough by itself to justify allowing prices to float (if you even think that justification is needed, my default would be freedom and I'd require justification to move in the other direction).
But beyond that you get additional supply by raising prices. That additional supply means more people get what they need.
So you get a greater amount of goods, more efficiently targeted at those who really need them, and you have a greater amount of freedom. Its good all around. Not perhaps for every single individual (those who are lucky enough to get to the line first, or who have connections, but don't have much money might be worse off) but there is more positive then negative. (And if one of those first in line poor people really are so desperate that they might die without the goods, presumably all the charity that we seem to all agree exists will allocate some of the goods to them. I could see myself paying the higher price, and then quietly sharing with the most desperate individuals.
Ok, consider this. Say there is some common item, like an orange. Two people have a rare disorder in that if they don't eat an orange a day they die. So a hurricane roars through, and all the oranges are destroyed except for one. Now one of those people has enough money to cover the normal cost of the orange, say a buck. The other guy has $1,000 in his pocket. Should it be first come, first serve? Or should it be higher bidder? You are basically arguing that the only fair way is highest bidder.
Suppose that there is one person with the rare disorder, and another person who's just really hungry and likes oranges a lot. Suppose the hungry orange lover gets in line first? First come first serve isn't really more fair than highest bidder. Either would be acceptable (at least if the seller has the choice), but if its first come first serve the first person gets it and the sick guy is out of luck. If its highest bidder, then even a poorer person might outbid a richer person, because he has more need. If I had $1000 in my pocket I wouldn't pay $1000 for the orange unless the alternative was to starve to death (and its relatively unlikely that I would starve before aid, or a bigger supply for sale could arrive). If I had the rare disease I'd spend the $1000 if need be, and I probably wouldn't be out bid, even by some other guy who has $2000 in his pocket. OTOH if I have the disease but I'm 2nd in line and the 1st guy won't give up his spot, either I try a resort to violence, or I'm SOL. And if you allow for the price of oranges to go up, then if I have the disease its more likely that I'll be able to get the orange on time. |
