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Tag Archives: prices

Reality Isn’t Optional, #778

Here’s a follow-up note to Mr. Lee Bennani: Mr. Bennani: Thanks for your follow-up e-mail to my previous note. You’re correct that among the perceived benefits of anti-price-gouging restrictions are “elevated chances for poor people to buy needed items instead of these things [being] all bought up by the rich.” This perception, alas, is false. Nothing is easier than to imagine that, with prices kept artificially low by government diktat, poor people’s ability to acquire goods is...

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Some Links

My intrepid Mercatus Center colleague Veronique de Rugy reveals how the coronavirus crisis puts many government regulations into clearer perspective. Here’s her conclusion: The large number of rules lifted by federal, state and local governments in response to this pandemic reveals the sad reality that many regulations serve little to no good public purpose. Hopefully, people will realize how counterproductive these rules were and will not allow them to be reinstated after the crisis is...

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More on So-Called “Price Gouging”

Peter Calcagno has a nice post over at EconLog titled “Price Signals, Price Gouging, and Philanthropy.” I encourage you to read it. A commenter on Pete’s post, Phil H, registered a mild objection. Here’s my (slightly edited) reply to Phil H, posted in the comments section of Pete’s post: Phil H: I think it incorrect to write, as you do, that: price gouging should be impossible when there are well-functioning markets; the existence of gouging demonstrates that the market has (temporarily)...

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Reality Isn’t Optional, #776

Here’s a letter to a Café Hayek patron: Mr. Bennani: Thanks for your e-mail. You’re one of four people who’ve e-mailed recently to scold me for allegedly failing to understand what you call “real world complications which make price gouging problematic.” These complications lead you to “side with consumers and political leaders that want limits on businesses’ ability to jack prices up.” I’m the last person to deny that reality is far more complicated and complex than any theory can...

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Quotation of the Day…

… 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...

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Quotation of the Day…

… is from page 131 of the 11th (2006) edition of one of greatest economics textbooks of all time: Paul Heyne’s, Peter Boettke’s, and David Prychitko’s The Economic Way of Thinking (original emphasis): We are extremely dependent on changing money prices to secure effective cooperation in our complex, interdependent society and economy. When prices are not permitted to signal a change in relative scarcities, suppliers and demanders receive inappropriate signals. They do not find, because...

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An Open Letter to Florida’s Attorney General

Ms. Ashley Moody, Attorney GeneralState of FloridaTallahassee, FL Ms. Moody: You issued more than 40 subpoenas in response to so-called “price gouging.” And you justified your actions with this written statement: “Floridians are searching for essential products needed to stay safe and healthy during this COVID-19 pandemic. Sadly, when they find these products for sale online, they often discover that the price tag makes them unattainable. This is unacceptable and unlawful.” Your...

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Strange Value System

Here’s a letter to a “relatively new reader” of Café Hayek: Mr. Rolfe: Thanks for your e-mail and for reading my and Veronique de Rugy’s op-ed on responses to COVID-19. You ask if I’m “not at least slightly angered when stores sell common goods at exorbitantly high prices.” My answer is no; I’m not at all upset. In fact, I’m pleased. Of course I lament the underlying conditions that cause the high prices – namely, the fall in supplies of goods relative to demands for them. But to be...

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Some Links

My emeritus Nobel-laureate colleague, Vernon Smith – writing in USA Today – is optimistic that the U.S. economy will survive, and survive well, the COVID-19 outbreak. Here’s a lovely essay on the false security of closed borders. (HT Tom Palmer) Ed Stringham shares a letter from 800 medical specialists warning against draconian responses to coronavirus. Alberto Mingardi asks if there exists better alternatives to lockdowns. Tyler Cowen predicts that among coronavirus’s victims will be...

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More on Responses to COVID-19

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...

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