Over the weekend, social media users flooded the internet with reactions to the myriad of headlines pouring out of Texas in the wake of Hurricane Harvey.
While most were centered on the unprecedented heroism demonstrated by everyday Americans, economically illiterate liberals fretted over the fact that the natural disaster made commodities like gas, food and even water more expensive.
According to images like these, businesses small and large are takin advantage of a very sensitive situation to exploit the needs of those hit the hardest by the storm.
Here’s the thing: this so-called “price gouging” is doing more to help the situation than liberals believe.
Let’s try to examine this through the eyes of people on the ground, and pretend that commodity prices remained unchanged after power lines were cut and the streets were flooded. How long do you think these goods would remain on the shelves?
The answer is not long. In fact, this would actually encourage people with means (who may not have been hit as hard) to strip all the resources they can find, leaving almost nothing for the rest of the population.
What’s happening here is a very easy lesson in economics. In a market setting, prices respond to supply and demand. When demand is very high, such as in a natural disaster, distributors have to maintain tight controls on their supply — which means prices go up.
Of course, you’re probably not going to find a whole lot of economic discussions on pages sharing images like this.
~ Facts Not Memes
