Sunday, November 04, 2012

BAD CONSERVATIVE ARGUMENTS

From Slate, courtesy of a facebook friend who asked me to pick it apart:

The Case for Price Gouging

The basic imperative to allocate goods efficiently doesn’t vanish in a storm or other crisis. If anything, it becomes more important. And price controls in an emergency have the same results as they do any other time: They lead to shortages and overconsumption. Letting merchants raise prices if they think customers will be willing to pay more isn’t a concession to greed. Rather, it creates much-needed incentives for people to think harder about what they really need and appropriately rewards vendors who manage their inventories well.

And 

Indeed, many of the problems associated with weather emergencies are precisely caused by the fact that we can’t count on shops to “gouge” their customers. I live in a neighborhood with buried power lines in a building that contains a supermarket on the ground floor. But I nonetheless found myself stuck in line Sunday evening at the Safeway stockpiling emergency supplies just in case something went badly wrong and knocked power out throughout the city. The issue wasn’t that I wouldn’t be able to get to the store in a worst-case scenario, as that I was afraid other people would already have bought up all the stuff. And indeed, by the time I made it, the shelves had been largely denuded of essentials such as bottled water, canned soup, batteries, and Diet Coke. Greater flexibility to raise prices would not only tend to curb overconsumption directly by encouraging people to buy less, it would inspire confidence that shortages wouldn’t arise, reducing the tendency toward panicky preemptive hoarding.

Last but by no means least, more price gouging would greatly improve inventory management. There is a large class of goods—flashlights, snow shovels, sand bags—for which demand is highly irregular. Maintaining large inventories of these items is, on most days, a costly misuse of storage space. If retailers can earn windfall profits when demand for them spikes, that creates a situation in which it makes financial sense to keep them on hand. Trying to curtail price gouging does the reverse.

More here

Of course, this is psychotic, turning logic on its head.  But it kind of sounds like a decent argument if you don't think too much, and if you only consider the internal reasoning and nothing else.  That's the thing, a lot of these weird libertarian arguments gain traction simply because they have a semblance of intelligence.  The operative word here, though, is "semblance."

I think the best way to address this claptrap is with personal experience.  A few years back, the greater NOLA area evacuated as Hurricane Gustav approached.  Most of us left by car, and, of course, that requires gasoline.  There were lines at gas stations, to be sure, but I managed to fill up, and had enough money left over for the rest of the journey out of harm's way.  Same thing with the recent Hurricane Isaac.  We didn't have to evacuate for that one, but people did need supplies.  I went to the store, and some of the stuff I wanted was sold out, but I did manage to get what I needed, and made out okay, and as with Gustav, had money left over, which was important because I didn't work for a week, what with power being out for most of the area.

Now imagine my situation with all that economically beneficial price gouging pushed by the essay linked above.  With gas prices up sky high, I might have been able to fill up my tank, but would have no more money for the evacuation, headed off to god knows where to do god knows what.  Or worse, I might not even have been able to buy enough gas to evacuate at all, leaving me to face injury or death.  With the price of supplies being jacked up, I might have been able to get what I needed, but would have been set back financially for some time: losing a week's pay coupled with paying exorbitant rates for batteries, water, and canned goods could have made it such that I couldn't pay my rent or bills, or would be penalized on student loan payments, and on and on.  Or I might not have even been able to get supplies, making me hungry and fucked for at least a week.

Here's the deal.  In a disaster you need to get large numbers of people to do stuff efficiently and quickly.  You need to get people to evacuate.  Or you need to get people to hunker down.  And that's not easy in a free society.  Creating financial disincentives against large populations doing the right thing is just fucking crazy.  It also lays bare the vicious and brutal inequality of our capitalistic system.  With price gouging, you create a two tiered situation: the rich, who can pay, get a good chance to survive; the poor, who can't pay, are on their own.

Libertarians, Ayn Rand cultists, neoliberals, and generalized conservative assholes can wag their shaming fingers all they want.  But the reality is that most people wait until disaster is imminent to prepare.  We are not a nation of survivalists.  Most people can't afford to be disaster-ready around the clock, anyway, and are simply too pressed with the business of life to pretend that they live in a Robert Heinlein novel.  I mean, that's why society exists, after all, to protect us when we need it.  We don't live on the frontier, as much as the right-wingers want to believe that.  We're not in a Mad Max movie.  Disdainful scowls cannot change human nature, cannot wash away the nature of civilization.

That is, hectoring platitudes and twisted logic about the beauty of capitalism don't save lives.  Especially in an emergency.

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