Politicians and the media are furious about price increases in the wake of Hurricane Katrina. They want gas stations and water sellers punished.
If you want to score points cracking down on mean, greedy profiteers, pushing anti-"gouging" rules is a very good thing.
But if you're one of the people the law "protects" from "price gouging," you won't fare as well.
Consider this scenario: You are thirsty -- worried that your baby is going to become dehydrated. You find a store that's open, and the storeowner thinks it's immoral to take advantage of your distress, so he won't charge you a dime more than he charged last week. But you can't buy water from him. It's sold out.
You continue on your quest, and finally find that dreaded monster, the price gouger. He offers a bottle of water that cost $1 last week at an "outrageous" price -- say $20. You pay it to survive the disaster.
You resent the price gouger. But if he hadn't demanded $20, he'd have been out of water. It was the price gouger's "exploitation" that saved your child.
It saved her because people look out for their own interests. Before you got to the water seller, other people did. At $1 a bottle, they stocked up. At $20 a bottle, they bought more cautiously. By charging $20, the price gouger makes sure his water goes to those who really need it.
Do those who don't worship the almighty dollar--those who purely consider "spiritual matters"--complain? How do you convert those considerations into incentives for me to move goods of interest to your babies from a place where they are abundant to the place where your starving kids are crying?
You're not doing it. You don't know how. I almost know how, but I'm not sufficiently motivated, by a pure sense of altruism, to take that last step to actually figuring out how to move the stuff to you.
Collectivists always take this level of calculation for granted. It is the collectivists' calculations that need to be ignored as unimportant.
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