A reader writes:
I’ve really been enjoying your series on money and Star Trek, I’m hoping that in the wake of the disaster in LA that you might also touch on the issue of "price gouging" (which I don’t think is going on).
Which comes to my question. Is there such a thing as price gouging from the standpoint of Catholic ethics? People think that hotel rooms going from $75 to $200 overnight is wrong, but I don’t think they know the point behind prices. But are there instances where there could be genuine "gouging?"
First, let me say that the following is NOT an analysis of how things are right now in the areas ravaged by Hurricane Katrina. What I’m about to sketch are some principles, but I am NOT saying that these do or don’t apply to the situation in the Gulf states. What the situation is on the ground there is still unclear. We still don’t even know how many people have been killed, much less could I say anything about the economics of the area–besides urging people to SEND AID (see the bottom of this post for into on how to help the disaster victims).
At the moment there are reports that there is a generalized law and order breakdown that call into question the degree to which the local economy is functioning. We can only do what we can to help and pray that stability will be restored soon.
I am not aware of any magisterial documents that use the term "price gouging." (Googling the Vatican web site doesn’t turn up any.) However, here’s what the Catechism of the Catholic Church has to say:
2409 Even if it does not contradict the provisions of civil law, any form of unjustly taking and keeping the property of others is against the seventh commandment: thus, deliberate retention of goods lent or of objects lost; business fraud; paying unjust wages; forcing up prices by taking advantage of the ignorance or hardship of another.
Though the term "price gouging" is not used here, the same basic idea seems to be present.
Note one element of what the Catechism says, though. It speaks of "forcing up prices." I’m not sure of all the different kinds of circustances that might happen. I suppose that it happens if a manufacturer were to start deliberately making less of something that was in demand due to a hardship. For example, if in a middle of a famine, a farmer decided to grow less food in order to drive up prices then that would be "forcing up prices by taking advantage of the . . . hardship of another."
But that’s not what we’re talking about in the case of a hurricane and hotel rooms. In that case, a hotel owner isn’t forcing up prices. The natural price point for the hotel rooms changes due to factors beyond the hotel owner’s control (i.e., the fact that a hurricane has rendered many homes unusable).
He would be forcing up prices if he decided, for some reason, not to rent all of the rooms he had in order to make more per room. For example, if he said: "Well, I’ve got 200 units I could rent, but I’ll close up 100 of them so that only 100 will be available for rent. Then I’ll make more on those 100 rooms." And he likely would be right: He’s make more per room with only a hundred rooms available for rent since the overall number of rooms available for rent in the city would be less.
It seems to me, though, that what such a manager did would be rather short sighted. First, while he would make more per room by doing this, it is not at all clear that he would make more money overall. In general, the market functions most efficiently and people will make the most money if they don’t do things like this. They may mistakenly think that cutting back production (or refusing to rent certain rooms) in order to cause a price spike will make them more money, but this may not be true.
For example, if the natural price point is $100 per room if the owner has 200 rooms to rent, he would make $20,000 a night for those 200 rooms. But if he closes half his rooms and that pushes the price point up to $120 per room (there still being a lot of other hotels that aren’t arbitrarily closing their rooms, so the natural price point doesn’t rise that much) then he’ll only make $12,000 a night for his 100 rooms in rent. He thus actually stands to make less money by forcing up prices.
Second, the motel owner who refuses to rent half his rooms in the wake of a hurricane is taking an awful risk that people will realize what he is doing. If they find out (and they are quite likely to find out; hotel staff know what rooms they’re not renting or cleaning, and they’re likely to talk) then at a minimum he will earn the severe displeasure of everyone who learns of this. He may find his business harmed for years afterward. He may find it harmed even sooner. He may have people simply force their way into his units and refuse to pay anything for them (and police are not likely to evict them given all the other pressing needs of the crisis). If he handles that situation badly, he may even find himself lynched.
So it seems remarkably foolhardy for someone to try this, but he would at least be trying to force up prices in order to take advantage of the hardship of others, and thus he would be sinning.
Let’s consider the more common situation, though: A hurricane rips through an area causing untold human suffering and in the process it wipes out or otherwise makes temporarily unusable many of the homes in the area. In this circumstances, people have several options: (a) sleep outdoors, (b) sleep in an emergency shelter like a sports stadium or school gym or homeless shelter, (c) stay with friends or relatives, or (e) rent a hotel room.
Obviously having a hotel room is preferable to options (a) and (b), and for many it is also preferable to (c). There is thus increased demand for hotel rooms. But since hotel rooms can’t be built overnight, the increased demand is met with a constant supply. When that happens, prices rise.
But in this case it’s not the hotel owner that is forcing up prices. The hurricane did that by destroying a bunch of homes. It was the hurricane, not the hotel owner, that changed the natural price point for a hotel room.
Could the hotel owner–out of the generosity of his heart–charge less than the new natural price for a room? Sure he could! But note two things:
1) At this point the hotel owner is being generous. It isn’t greed to charge the natural price for something in current market conditions. It’s generosity to charge less than the natural price of a thing. He thus might be generous in order to help out folks who would otherwise have difficulty paying for rooms.
2) It’s not clear that this generosity of the hotel owner would actually help that many people. It might even cause overall harm. Why’s that? Thomas Sowell explains:
Those who got to the hotel first would fill up the rooms and those who got there later would be out of luck — and perhaps out of doors or out of the community. At higher prices, a family that might have rented one room for the parents and another for the children will now double up in just one room because of the "exorbitant" prices. That leaves another room for someone else.
Someone whose home was damaged, but not destroyed, may decide to stay home and make do in less than ideal conditions, rather than pay the higher prices at the local hotel. That too will leave another room for someone whose home was damaged worse or destroyed.
In short, the new prices make as much economic sense under the new conditions as the old prices made under the old conditions.
It is essentially the same story when stores are selling ice, plywood, gasoline, or other things for prices that reflect today’s supply and demand, rather than yesterday’s supply and demand [SOURCE].
This is a situation that I may one day face, personally. California doesn’t have hurricanes, but it does have other disasters (earthquakes, fires, mud slides). A couple of years ago, the fires were closing in on the area where I live, and I came within minutes of evacuating. I had my pickup packed and everything.
At that time, QualComm Stadium was being used as an emergency shelter, and I might well have gone there. It would have been better to sleep on a mat in the stadium than in a building that was burning down around me, but it would have been better yet to sleep in one of the hotels down the road from the stadium. (The stadium is right next to "Hotel Circle" in San Diego.) If I learned that the rooms in Hotel Circle that normally go for $100 a night were now going for $300 dollars a night, I’d have to ask myself: "Is it really worth it to me to pay the money to sleep in one of those rooms, or would I rather keep my money and sleep here in the stadium for a few nights?"
Personally, I’d probably have chosen the latter and roughed it in the stadium, but there are many people who might have special needs that I don’t have (e.g., a person in frail health who needs a room and bed more than me) and who would be willing to pay for it. The jump in prices that deterred me from renting the room thereby opened it up for someone who felt they needed it more than I did and who was willing to pay the price to get it.
Of course, rich people are more able to pay for such rooms than poor people, but then the rich aren’t likely to stay in an area being devastated by fire or hurricane or what have you. If I were rich, I’d probably try to get transport out of the area altogether and stay in a hotel where the prices were lower rather than pay for an expensive one in the city center.
Further, imposing price caps (voluntarily or by government mandate) so that people who aren’t rich can more easily afford the rooms also will prevent people who really need the rooms (as opposed to those who could sleep in the stadium or with friends and family or even out of doors) from being able to get them since they’ll just fill up quicker with people who don’t have that high a need for them.
The market mechanism in most situations is thus still the best method for determining the allocation of goods and resources. It’s not perfect, and in fact the market can break down so much that the ordinary rules regarding property rights are morally suspended. The Catechism notes:
2408 The seventh commandment forbids theft, that is, usurping another’s property against the reasonable will of the owner. There
is no theft if consent can be presumed or if refusal is contrary to
reason and the universal destination of goods. This is the case in
obvious and urgent necessity when the only way to provide for
immediate, essential needs (food, shelter, clothing . . .) is to put at
one’s disposal and use the property of others.
In sufficiently extreme circumstances, the government might even step in and declare marital law and commandeer hotels, prioritizing who gets the rooms on a needs basis. The Catechism also acknowledges:
2406 Political authority has the right and duty to regulate the legitimate exercise of the right to ownership for the sake of the common good.
But much of the time it would be hard for the government to do as good a job as the market in determining the most efficient use of resources. That’s why Communism failed.
One therefore shouldn’t be too quick to seek a government remedy to a difficult situation. It is possible that the government solution may be better than what the market would produce, but usually this is not the case. The market tends to be more efficient than the government.
To sum up:
- While the Church doesn’t seem to use the term "price gouging," it does recognize that one can immorally force up prices to take advantage of others’ hardship.
- This is not the same thing, though, as having the natural price point of a resource change due to a disaster.
- It is not greedy to charge the new natural price of a thing, but it is generous to charge less.
- Doing so may help some but may not help the right ones since it may prevent those who need the resource more from getting it since others may fail to conserve the resource if prices are kept artifically low.
- In certain and extreme circumstances (which we haven’t fully explored) one can simply take what one needs without it being stealing.
- The government has a right to regulate the exercise of private property rights, but there must be caution in this area because the government usually isn’t as efficient as the market.
All that being said, I have no idea what the economic situation is at present in the areas hit by Katrina. I simply hope that people will continue to pray for those harmed by the hurricane and that they will do what they can to help them directly.
SEE HERE FOR INFO ON HOW TO DO THAT!
Thomas Sowell explains:
I knew you were going to quote him when I read the headline. He has written about “price gouging” on many occasions.
If the price of batteries doesn’t go up, than the first person in the store might buy them all up and hoard them, leaving everyone else without batteries. Also, the high prices offer incentives to businesses in nearby, unaffected areas to ship their goods into the devastated areas as quickly as possible.
I thought about gouging as I filled my tank this morning. Gas went from $2.69 to $3.00 overnight. I thought “Wait a minute. This is very likely the same gas that was in the ground yesterday. How can the management justify raising the price?”. But then, Hurricane Katrina has made all gas worth more, even the gas in underground storage tanks that was bought at yesterday’s wholesale price.
Don’t ever, ever, ever think that Big Oil cares for ANYBODY but itself.
BTW, is anybody asking, in a serious way, whether New Orleans “ought” to be rebuilt? I mean, obviously, something is going to go back in there, but the reality is that some locales, over times, became economically unsustainable as a result of natural forces. I read about how much it would cost just to re-foundation little neighborhood streets, and I ask, why do it? So it can be totally flooded again in 1 or 5 or 10 years? As for the “heritage” that N. O. represents, well, it has long since ceased being anything but a gross caricature of itself. Anyway, it seems a lot of money can be saved, now and in the future, if one simply admits that most of N. O. is SUPPOSED to be underwater, and that the real mistake was in pretending that it didn’t for, oh, at least the last 50 years.
AFAIK, the market mechanism isn’t predicated on ANYONE caring for anyone but themselves.
Don’t ever, ever, ever think that Big Oil cares for ANYBODY but itself.
Is this news to you?
Go to Neal Boortz web site to get his take on Georgia’s Governor threatening “heavy fines” for anyone overcharging customers. boortz.com/nuze/index.html
I can’t put in the full link because this site’s software thinks it is comment spam.
Not that I particularily like it, but I can positively that there isn’t any price gouging occurring except possibly in the actual affected area. For example, with gas prices there is competition present, but the ability to replace existing inventories is highly challenged at the time. Since people are going to want gas for the next 10 days, gas stations need to insure they have gas for the next 10 days. It makes business sense.
As far as the affected region goes, there is very little competition present, because the competition has been destroyed. The market is not fluid because of the destruction which doesn’t allow the wide destribution of goods. This is very similar to corporate buyouts making monopolies except the winds of a hurricane caused this. This is called a market failure. Quite frankly the dollar is worthless in this area, because no one is in an excess position that would allow them to get goods at a later date. Food and water aren’t even stabilized goods right now.
To Ed Peters: When considering whether New Orleans ought to be rebuilt, the laws of politics come into play. There are a lot of voters there. One could argue that the popular will dictates that the city be rebuilt, even if it isn’t logical. (This issue arises in Southern California after a landslide occurs.)
To Jimmy Akin: Would the concept of “usury” apply here?
ONTARIO. Understood, of course, but even politics eventually must eventually yield to nature. BYW, when I was in CAL, I got real sick real fast of my federal and state tax dollars being spent to help the super rich rebuild their show-homes on the hillsides, lest they be deprived of their spectacular views. My friends in Tijuana made an interesting comment: only two kinds of people build on hillsides, the rich in America because they can afford it, and the poor in Mexico, because they can’t afford anywhere else.
STEVE: the more a commodity acts like a utility (admittedly, a hard line to draw) the less it should be shackled to free market forces (which, as you know, I strongly support). That’s (one of) my points about oil.
Jimmy,
I know you just stated sound economic principles but something seems missing from the equation. If the natural price is the highest price the market will bear then how does that reconcile with a monopoly or an oligopoly (gas). In both those situations, the price can rise and the market will be forced to bear it.
And what about intent. What if a price increase is done out of greed rather than a need to hedge rising production costs, a supply drop, or a demand increase? One may raise price out of greed and still stay in business because he hasn’t hit that what-the-market-will-bear point. Or should that be viewed with the idea that the natural price for the product was not reached yet and the greed was incidental?
Ed Peters writes:
Don’t ever, ever, ever think that Big Oil cares for ANYBODY but itself.
Thomas Sowell claims no such thing, but in his books “Basic Economics” and “Applied Economics,” he discusses how market forces still cause even the greedy to charge a natural price in order to maximize sales. Charge too much and people will buy from someone else, or they’ll buy less, or they’ll find some alternative to buying at all.
Bill,
You are assuming a fluid market (pun not intended). Housing and work patterns take years to change. Even assuming that a person realized they had to end their commuting today, they realistically couldn’t act upon it for 3 to 9 months. The scary thing is that there will be millions and millions of people taking a vacation this weekend. I’m curious if anyone has decided to cancel their vacation. I wouldn’t be surprised if you find millions of stranded travelers Monday, not because of the price of gas, but because there is none to buy.
“It seems to me, though, that what such a manager did would be rather short sighted. First, while he would make more per room by doing this, it is not at all clear that he would make more money overall. ”
Years ago, in my Pre-Calculus class, we were given a word problem in the application of limits, in which it was proven, to my astonishment, that, yes, one *can* make more money by raising the rates to a near-intolerable level even if it means a higher vacancy rate. Which is why, even in a tight apartment rental market, you can have units standing vacant. Sheesh!
Giacinto writes:
I know you just stated sound economic principles but something seems missing from the equation. If the natural price is the highest price the market will bear then how does that reconcile with a monopoly or an oligopoly (gas). In both those situations, the price can rise and the market will be forced to bear it.
I know I’m no Jimmy Akin, but I hope you don’t mind me taking a stab at the question.
When Rockefeller’s Standard Oil had a near monopoly, the price of oil went down. Why? Because he wanted to make as much money as he could, and he knew that buy finding ways to produce and sell his product at a lower cost, he’d sell more.
If an oligopoly or a monopoly charges a price that the demand does not merit, or holds back on its supply in order to create a shortage, a couple of things will happen. One is that people will look at alternatives to consuming the product, or at least to consume less of it. (Sometimes, though, government interference limits alternatives, as when zoning laws prevent more housing from being built near places where people work, or when new competitors are barred from entry into the market.)
Another thing that will happen is that the cost of everything else will rise in accordance with the price of gas. For example, the cost of gas used to bring groceries to your grocery store will be worked into the price of groceries, and the cost of labor will be influenced by the cost of groceries and commuting to work. So, the oil-campany shareholders will make more money, but their dollars will be worth less.
Another possibility is that someone within the oligopoly will get greedy and lower prices to increase sales against the competition. Then the other companies will follow suit.
And what about intent. What if a price increase is done out of greed rather than a need to hedge rising production costs, a supply drop, or a demand increase? One may raise price out of greed and still stay in business because he hasn’t hit that what-the-market-will-bear point. Or should that be viewed with the idea that the natural price for the product was not reached yet and the greed was incidental?
Greed us difficult to define, because it’s not unnatural to want the value of something. I may want more money for my labor so I can buy that Corvette, or I may want it so I can send my kids to college, or I may want it so I can give more to the Catholic Worker. In a free market, these motives don’t matter much in determining prices. I can charge only as much as people will pay for whatever I have to sell, be it boarding at my hotel or my labor.
Greed will matter in terms of my spiritual condition. If I horde material goods instead of being generous, that will greatly hinder me in my journey to Christ. I imagine many of us will, at the final judgment, be scurrying around like Oscar Schindler at the end of “Schindler’s List,” muttering, “I could have helped feed more children if I’d done without this … and that … and that …”
Greed is always a vice, but I believe a free market is the best way to mitigate its harmfulness against others.
M.Z. Forrest writes:
Bill,
You are assuming a fluid market (pun not intended). Housing and work patterns take years to change. Even assuming that a person realized they had to end their commuting today, they realistically couldn’t act upon it for 3 to 9 months.
They couldn’t realistically move to a new home today, but they could look at other alternatives — ride sharing, public transportation, bicycling, etc. For some, none of these options will work. For others, these options may have been dismissed because of the inconvenience, but now the higher prices will make them reconsider. As with the hotel rooms, as some find ways to reduce their gas consumption, it leaves more gas for others who have fewer alternatives.
The scary thing is that there will be millions and millions of people taking a vacation this weekend. I’m curious if anyone has decided to cancel their vacation. I wouldn’t be surprised if you find millions of stranded travelers Monday, not because of the price of gas, but because there is none to buy.
So are you saying that the gas companies are charging too little, and that they ought to charge more to discourage consumption?
Yes.
forcing up prices by taking advantage of the ignorance or hardship of another
Wow. Does this mean if I’m selling my house, and I price it unrealistically high, and someone bites on the price, I have to lower my price because I consider the person ignorant? (This is assuming I have full and truthful disclosure on the defects of the home)
WonderTwin Italics DE-activate!
Wonder Twins! HA!
I got real sick real fast of my federal and state tax dollars being spent to help the super rich rebuild their show-homes on the hillsides, lest they be deprived of their spectacular views.
That is an interesting point. Should any tax dollars be spent rebuilding homes that are built in a landslide area, or earthquake zone, or a river floodplain, or a hurricane area? Why should taxpayers bear the burden of people making poor decisions on where to locate their homes?
Good question, Brian. There are risks everywhere, but people can buy insurance to help protect themselves from that risk. If the government bails out everyone who doesn’t have insurance, what’s the point of buying it?
On the other hand, no one wants to see dirt-poor people who maybe had a home, but nothing else, left in the street. I would prefer to see these cases handled by private charities, which can sort out who really needs help and put restrictions like, “We’ll help you, but only if you build here and not there …”
But realistically, we aren’t going to sell that kind of policy that quickly in this situation. I wouldn’t be sorry to see the people who are helped forced to relocate to a place with reduced risk, and perhaps forced to pay back the costs over time if possible, and forced to buy homeowners insurance until they do pay it back. But I don’t believe holding people accountable for their decisions should mean tossing them in the street.
How to discourage imprudence while helping the unfortunate — and sometimes even the imprudent — is a moral problem that must be analyzed over and over. . . .
I note that even with the prices, gas stations are running out of gas.
What I find very odd about these “natural price” analyses is that they very rarely acknowledge real abuses, and indeed tend towards claiming abuses are impossible or swiftly punished. Almost always, such analyses treat the owners as more rational than his customers, when in fact owners and capitalists are also susceptible to mass hysteria and a mob mentality in extreme situations. And sometimes in not so extreme situations, as the nineties tech boom-bust suggests.
I’m beginning to suspect that there’s more to capitalist critiques than what I’ve been led to believe, and I’ve been soaked in the works of unapologetic defenders of capitalism like Thomas Sowell.
Kevin is right.
I don’t see how a free market assumes that one party is more rational than the other. An irrational hotel owner who charges too much won’t be able to rent all his rooms out, until he comes to his senses and adjusts his prices. An irrational consumer who won’t pay what they consider too much for a room won’t get a room until they are willing to pay, or until circumstances change to bring the price down.
And, even if one is rational, one doesn’t have complete knowledge of where others stand. What I think is a reasonable price may shift as I learn what others are willing to pay.
But, while a hotel owner may adjust his prices as he learns what people will or won’t pay, getting the government to adjust prices takes much more time, and the government simply can’t respond quickly enough to changes in the market conditions. So, when the government lock prices, you end up with product surplusses and shortages that would have been eliminated by price changes.
As Mr. Akin and Thomas Sowell have observed, these situations can sometimes hurt those most in need of the product most.
As far as whether price gouging is possible, it is, when one deliberately creates circumstances to create a shortage, make the need for a product more urgent or eliminate other options than consuming the product. These things are usually much easier for governments to do than individuals, however, and that’s part of the reason I am generally more trusting of the free market than of government intervention.
The free-market model doesn’t assume people are perfect or that they have the right motives; I just believe it makes such imperfections or improper motives much less damaging.
What is so difficult about this point? The free market does not work, or only works very badly, when the market is not free. And in times of crisis, the market is not free. Look: as a general rule, I don’t think national guardsmen should be allowed to walk down streets with M-16s and permission to shoot people. But I got no problem with martial as applied in a crisis. Well, is it such gigantic leap of logic to think the same kind fo thing could be said, in principle, about hoarders, price-gougers, and other exploitationists in times of crisis? Sometimes, the common good demands the curtailing of certain freedoms which, under most other circumstances, we should fight to keep.
Well, is it such gigantic leap of logic to think the same kind fo thing could be said, in principle, about hoarders, price-gougers, and other exploitationists in times of crisis? Sometimes, the common good demands the curtailing of certain freedoms which, under most other circumstances, we should fight to keep.
“In principle”. Yes, in principle there should be some mechanism to prevent price gougers and other situations that you mention. But the reality is that controls do not work. Do you remember the gas lines under Jimmy Carter? I do. What a failure.
I even remember the price controls invoked under Richard Nixon. Another failure. While the free market is not perfect, and under some conditions people are harmed. But there are no workable alternatives that doesn’t screw things up worse. But then again, I am open to any instances where price controls actually work.
Ed Peters says: “What is so difficult about this point? The free market does not work, or only works very badly, when the market is not free. And in times of crisis, the market is not free.”
I can agree with that. For example, National Guardsmen have been giving away free bottles of water to New Orleanian refugees. They have not been charging them $5.00 a liter, which could arguably be a “fair” market price, given the demand versus supply ratio.
Anyone with a substantial supply of water and the means to get it to those suffering people would be morally obligated to do the same and give away free water at a substantial profit loss. Jimmy Akin does not need to whip out the Catchism on this one; any reasonable heathen could hardly disagree.
So, in the case of those suffering in the crisis gulf states, “Ferenginomics” are suspended; free-market principles do not apply to those in desperate need of water, food, diapers, insulin, formula, etc.
Hotel rooms, the example cited by Jimmy and Thomas Sowell, would be intermediary needs. We have an obligation to shelter in hotels the sick, weak and elderly who will not be able to survive in less-than-hotel-like conditions. If that means the government requisitioning hotel rooms to shelter those at-risk members of the public, then so be it.
However, Mr. Peters, the very first post you made in this combox was: “Don’t ever, ever, ever think that Big Oil cares for ANYBODY but itself.” From the get-go, you have been talking about OIL, the price spikes in GASOLINE throughout this entire thread.
Now, based on what I’ve just said, if someone is in DIRE NEED of oil or gasoline in a CRISIS situation, if he will DIE unless he gets it, then SOMBODY simply needs to give that poor fellow his gasoline. Only the most despicble of the Ferengi race would disagree. But that’s not the situation that we’re talking about; we’re talking about pretty-darn-high gas prices that create an inconvenience, a monetary pinch and a necessity to make some relatively low-level sacrifices.
Making some sacrifices to spend two, three, even six times more than one is used to on gas is not a “time of crisis.” It is a hassle, a crimp in one’s lifestyle–at worst, it is a setback for those hardest hit by rising gas prices. But not a crisis.
The poor will undoubtedly be hit the hardest.
However, imagine if you woke up tomorrow and found that someone had miraculously dropped gas prices to $0.69.9/10 a gallon. Practically everyone would be filling up their cars, gas cans, empty 2-liter bottles, bathtubs, etc. with cheap gas.
Practically everyone would do this because practically everyone realizes that there is a nigh-insationable demand for oil in a time when we do not have all the oil in the world. (Indeed, we’ve tapped all of our biggest natural oil supplies, so even the world doesn’t have all the oil in the world.)
In the event of an artificial price drop, then, we can reasonably predict that those who can most afford it (i.e., the very rich) will stock up on as much $0.69.9/10 gasoline as they can–and those who can barely afford to fill up their cars (i.e., the poor) will be left scrounging to find a gas station that still has gas left after the rich have descended and sucked up more than their fair share of cheap petrol.
But we’ve known all along that oil is a non-renewable resource. So that means that even if those of us who are poor manage, somehow, to shelter ourselves from the avarice of the rich, it makes no nevermind in the long run because all the oil in the world is going to get sucked up and burnt up anyway. No matter if it’s the rich or the poor who will be doing the majority of the sucking and burning.
In this regard, gas price-spikes may be good in the long run. No one wants to bother themselves with making alternative forms of energy(e.g., fuel cells, “grassoline,” ethanol, etc.) more efficient when the price of gas is $0.69.9/10 a gallon. However, as the price of gas rises, you can bet your grandma that more and more entrepenuial minds will start looking for ways to get in on new markets for cheaper altenatives to fossil fuel.
And finally, speaking of markets, Mr. Peters has argued that “the more a commodity acts like a utility . . . the less it should be shackled to free market forces (which, as you know, I strongly support).”
Well, Mr. Peters, if you “strongly support” a free market, then why do you refer to it as being a “shackle”? If the free market is, in actuality, free, then it cannot be a shackle. However, it the free market is, in actuality, a shackle, then we should start calling it “the Shackled Market.”
Once this remedy to our semantic argument is made, Mr. Peters, I will have strong words to make with you for giving your “strong support” to the Shackled Market. Shackles are a universal symbol of slavery and of imprisonment.
How dare you, Mr. Peters, how dare you give “strong support to the enslavement and imprisonment of the market?
Ry, you either see it or you don’t.
Anyone with a substantial supply of water and the means to get it to those suffering people would be morally obligated to do the same and give away free water at a substantial profit loss.
How about “legally”?
Because if you force him to suffer the profit loss — you will rapidly find, in many cases, that you have people dying of thirst.
By definition it is not easy to obtain supplies of the not readily available. If you say that the reward can not be commeasurate with the difficulty, you will find that many people say, to heck with this.
Ed Peters says: “Ry, you either see it or you don’t.”
Mr. Peters, I’m afraid that you have unfortunately used an an indefinite pronoun. What is this “it” that I can either see or not see? Please specify.
Mary asks: “How about ‘legally’?” Well and good, but this would have no impact on the point I was making. All I was saying, Mary, was that if, hypothetically, you had a large supply of bottled water and the reasonable means to convey it to people who you knew were dying for lack of water, you really ought to try to get that water to those people.
Mary quotes me in her post, and, according to myself, all I said was that “Anyone with a substantial supply of water and the means to get it to those suffering people would be morally obligated to do so”.
I said nothing about forcing someone to suffer profit losses. I only meant, in essence, that a guy who already had a stockpile of bottled water would be a good person if he said to himself, “Gosh, I have all this extra bottled water in storage while people are dying of thirst. I should do my best to see if I can get that water to those who are truly in need.” However, he would be a bad person if he said, “People are dying from thirst! Geez! I need to protect my unnecessarily large stockpiles of water from those desperate victims!”
Perhaps, Mary, you intended to refer to my assertion that hotel rooms could be justifiably requisitioned by the government to house the most vulnerable in a situation such as the one we are now seeing in the Gulf States.
In this case, I was only trying to find common ground with my good buddy, Ed Peters. Mr. Peters says: “The free market does not work, or only works very badly, when the market is not free. And in times of crisis, the market is not free.”
And, to an extent, Mr. Peters is correct. In a situation such as the one we are currently seeing in the New Orleans and the Gulf States, it would be beyond absurdity to demand “free market” restitution to supply those helpless victims with–at the very least–the bare necessities of life.
Where I don’t understand Mr. Peters is in his definition of “crisis.”
I consider the current situation in the Gulf States to be a crisis. But a sharp rise in gas prices is small potatoes compared to what we have seen developing in the Southeast, especially places like the Superdome in N.O. One can “ride out” a sharp rise in gas prices. Those trapped in N.O. cannot “ride out” dehydration and lack of necessary supplies. i.e., those who are within the afflicted areas are in a state of crisis; those who are outside those areas are not.
Mr. Peters says: “Look: as a general rule, I don’t think national guardsmen should be allowed to walk down streets with M-16s and permission to shoot people. But I got no problem with martial as applied in a crisis. Well, is it such gigantic leap of logic to think the same kind fo thing could be said, in principle, about hoarders, price-gougers, and other exploitationists in times of crisis?”
I just cannot understand where the gap between our understanding of the issue is here, Mr. Peters. The federal government has already said that it will not tolerate “gougers” (which would, by extent, necessarily includes hoarders and “other exploitationists,” since one cannot price-gouge withough hoarding or exploiting).
Thus, that leaves you and me, Mr. Peters, on the same page as the federal government. We all are opposed to “price-gouging” at the pumps; we all have “strong support” for “shackling” goods and services to the “free market,” with the “exception” that people in a “crisis” should cared for “immediately.” (WonderTwin “Quotation” Marks DE-activate!)
Where then, Mr. Peters, does this mysterious it come into play? I’m trying to agree with you about stuff; why are you being all weird about it?
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