And what is the end result of empty shelves? Is that an acceptable solution?
I don't understand people who advocate for policies that almost guarantee empty shelves instead of a policy that would avoid shortages but at a higher price temporarily.
In my mind the higher price followed by a return to normalcy is a much better outcome for rich and poor alike than a complete shortage with nothing on the shelves.
A: No price controls, scalpers buy everything and resell at 1000%. Only people who can pay that much get it until the manufacturer ends up at 10x output, which can take a long time.
B: Price controls, at least some distrubution of everyone gets some, less incentive to hoard, stores still allowed to raise prices a little (just not a predatory amount detached from real costs) when the manufacturer does when ramping up production.
The shelves are empty in either case, the difference being a nonzero amount going to poorer people in B.
In your A: situation you are explicitly saying that the normal suppliers are not raising the price. I am saying that the best solution to this problem is for the normal suppliers to raise their prices so that scalpers are disencentivized and regular consumers are judicious in their purchases.
So you are forcing a false choice between your A and B scenarios.
A is what was happening in real life before B started happening. Suppliers aren't gouging on their own out of a combination of looking out for their brand and existing laws. The best scenario is clearly where nobody is allowed to price gouge. Why are you so insistent on $100 toilet paper being a good thing?
> Why are you so insistent on $100 toilet paper being a good thing?
Why are you throwing up straw man arguments? I'm not in favor of $100 toilet paper. I'm in favor of letting market mechanisms resolve supply and demand imbalances. Anyone who thinks that restricting price increases is required to prevent $100 toilet paper really doesn't have a clue as to how the market works.
True enough. However, this is only true if prices go up everywhere. If people can buy at Walmart for $1 and sell on Amazon for $5...
I am most definitely a free market person, yet one has to recognize controls are important in order to deal with degenerate or corner cases. One such case is when panic sets in.
You know what would control hoarding? Higher prices.