Capitalism and the Art of Hand Sanitizer

[glenn1]

You think the fact that it's selling out literally everywhere isn't a signal to potential market participants? It's literally selling as fast as they can make it, what would increasing price do other than screw people over?

OK let's try this from the POV of a producer. There's a shortage of hand sanitizer in <insert city here>. You're already producing at capacity and need to decide whether to incur the costs to create a new production line which may be quite substantial and time consuming. Indeed you're unsure if you start the line, it will even begin producing before the crisis is over because you still need to build/staff/supply it which takes time. If you succeed then you can move an additional X units at the same price as now until the situation resolves, at which point you'll need to decommission the line to avoid oversupply and future negative price shocks. Do you as a capitalist make that investment?

Now change the scenario where you're the distributor. Do you hire a new driver (who will presumably want higher pay to drive directly into coronavirus territory) knowing you won't make any additional revenue to cover the additional risks you're assuming much less make any new profit on the route?

 

[[DHT]Osiris]

OK let's try this from the POV of a producer. There's a shortage of hand sanitizer in <insert city here>. You're already producing at capacity and need to decide whether to incur the costs to create a new production line which may be quite substantial and time consuming. Indeed you're unsure if you start the line, it will even begin producing before the crisis is over because you still need to build/staff/supply it which takes time. If you succeed then you can move an additional X units at the same price as now until the situation resolves, at which point you'll need to decommission the line to avoid oversupply and future negative price shocks. Do you as a capitalist make that investment?

Now change the scenario where you're the distributor. Do you hire a new driver (who will presumably want higher pay to drive directly into coronavirus territory) knowing you won't make any additional revenue to cover the additional risks you're assuming much less make any new profit on the route?

How about, make use of the emergency fund your very responsible government set up in order to cover the additional costs of the driver, and potentially the new production lines. I would never expect the free market to handle any of this, or make any rational decisions based on supply/demand when lives are at stake.

What I do NOT expect, is for those producers to start making additional money on the backs of the sick and dying. That's a real good way to find yourself in front of a congressional inquiry in my books.

 

[pmv]

Capitalism can limit "price gouging" at the expense of causing shortages and inefficient distribution (basically it's "first come first served" without regard to need). Prices are a signal and if you simply disallow high prices due to a crisis situation the signal doesn't work. If you're willing to accept that tradeoff to "prevent people from getting screwed" then basically you're accepting the tradeoff that another person/organization may need to do without. Joe Blow gets his case of Purell for "regular" retail price and the ER department of the hospital goes without.

You sound like the East India Company refusing to allow famine relief while millions starved in Bengal. Because it would interfere with the workings of the free market.

Reality is more complex than toytown libertarians make it out to be.

Yes, prices are a signal, and that is why command-and-control central-planning is not efficient at many things. It's why the USSR was crap at producing consumer goods. But leaving everything to 'the market' can lead to huge problems as well, because markets are not perfect. You need to employ a bit of sense.

Privatising war-fighting, for example, rarely goes well. Do you really want to let military units bid against each other for the use of military assets? Let the enemy put in a bigger bid to get your airforce to bomb your own airfields?

People died of malnutrition during WW1, because there was no rationing. In WW2 they rationed the limited food supply and people didn't starve.

That said, I'm not actually convinced hand-sanitizer is really necessary for most - I just wash my hands with soap and water regularly.

 

[sandorski]

Price Gouging: I can make a shit ton of Money cause these fools will Pay.

There's no consideration of Supply/Demand required.

 

[glenn1]

How about, make use of the emergency fund your very responsible government set up in order to cover the additional costs of the driver, and potentially the new production lines. I would never expect the free market to handle any of this, or make any rational decisions based on supply/demand when lives are at stake.

What I do NOT expect, is for those producers to start making additional money on the backs of the sick and dying. That's a real good way to find yourself in front of a congressional inquiry in my books.

Do you expect Democrats (especially the AOC and Bernie Sanders wing of it) to go along with allowing and funding this? Hell no, they'd be decrying how the government was enabling "mercenaries". I don't really care who pays the "crisis premium" but if you want additional supply the premium must be paid, government or end-consumer is immaterial to me.

 

[[DHT]Osiris]

Do you expect Democrats (especially the AOC and Bernie Sanders wing of it) to go along with allowing and funding this? Hell no, they'd be decrying how the government was enabling "mercenaries". I don't really care who pays the "crisis premium" but if you want additional supply the premium must be paid, government or end-consumer is immaterial to me.

I wasn't actually bringing any party into it, but I know I can always rely on you to wave a flag.

I want a responsible government, I give zero shits who's colors are on it. You should care who pays the premium though considering one side has a vested interest in protecting the people, and the other an interest in making money.

 

[sportage]

Walmart was totally out of TP. Shelves bare. Not one single pack of TP to be found.
Can anyone imagine if this were really bad, the virus that is?
Stores bare, essentials out of stock, and eventually stores would have no choice but to ration, even rationing TP.
We all know what this means, the lack of TP that is, it means that Taco Bell must close.
But I bet that top 1 percent would have their TP, and plenty of it.

 

[fleshconsumed]

Walmart was totally out of TP. Shelves bare. Not one single pack of TP to be found.
Can anyone imagine if this were really bad, the virus that is?
Stores bare, essentials out of stock, and eventually stores would have no choice but to ration, even rationing TP.
We all know what this means, the lack of TP that is, it means that Taco Bell must close.
But I bet that top 1 percent would have their TP, and plenty of it.

I keep hearing this on internet, but both my regular grocery store and neighborhood ALDI had plenty of TP yesterday. Where do you all guys live that your local stores are out of TP?

 

[glenn1]

I wasn't actually bringing any party into it, but I know I can always rely on you to wave a flag.

I want a responsible government, I give zero shits who's colors are on it. You should care who pays the premium though considering one side has a vested interest in protecting the people, and the other an interest in making money.

It isn't waving a flag as much as it's a reality check. The progressive wing wouldn't support it for the same reason the conservative wing of the GOP wouldn't support a wealth tax to pay for the premium.

It's worth noting the "interest in making money" side is also composed of people so unless you're considering them less than human you should reconsider the way you conceptualize your value system.

 

[[DHT]Osiris]

It isn't waving a flag as much as it's a reality check. The progressive wing wouldn't support it for the same reason the conservative wing of the GOP wouldn't support a wealth tax to pay for the premium.

It's worth noting the "interest in making money" side is also composed of people so unless you're considering them less than human you should reconsider the way you conceptualize your value system.

I think anyone that inflates prices during a crisis considers those they're selling to to be less than human. I disagree that a Democrat wouldn't support emergency funding to fill gaps needed during a crisis.

 

[whm1974]

Looks like those who are defending Price Gouging are forgetting what Artificial Scarcity means. Large Corporations, such as Apple intentionally make fewer units in order to drive up demand and hence prices. Usually this is with done with Luxury Goods and Monopolies, even with goods that are not that hard and expensive to make.

Artificial scarcity - Wikipedia

en.wikipedia.org

 

[glenn1]

Looks like those who are defending Price Gouging are forgetting what Artificial Scarcity means. Large Corporations, such as Apple intentionally make fewer units in order to drive up demand and hence prices. Usually this is with done with Luxury Goods and Monopolies, even with goods that are not that hard and expensive to make.

Artificial scarcity - Wikipedia

en.wikipedia.org

Goods that are "not hard and expensive to make" might still have a high IP content which presents a large barrier to entry. For example, the costs to produce a pharmaceutical are low once you've spent the money to create the IP to formulate it. Hand sanitizer likely doesn't have a large barrier to entry but demand has gone parabolic in the short term and there's no guarantee that costs will be recovered by any additional suppliers that come online to cover the short-term demand. That's doubly true if you limit their ability to recoup their startup investment costs by capping prices below where the supply/demand curve would otherwise drive them.

 

[soulcougher73]

It's worth noting the "interest in making money" side is also composed of people so unless you're considering them less than human you should reconsider the way you conceptualize your value system.

I do consider people who price gouge in order to try and make more money off a bad situation less than human. They are scum who value money over human lives and doing the right moral/ethical thing. So welcome to Club Scum, Glenn1.

 

[desy]

So Uber charges 'surge pricing' voila supply and demand, chance favors the prepared, grasshopper and the ant. . .
So, you have a storm, people need generators, people who have generators take the energy and effort to get more generators in an area desperate for them because they are rewarded. Having more generators normalizes the distraught region faster for everybody due to availability.
Win

We haven't been capitalist or communist ever, as with everything you will see imbalances. If somebody is purposefully holding back while people suffer so they can drive up the price then I have a problem.

 

[pmv]

It's worth noting the "interest in making money" side is also composed of people so unless you're considering them less than human you should reconsider the way you conceptualize your value system.

How does that differ from reconsidering your system of value concepts, or reconceptualizing your value considerations, or revaluing your conceptual system or re-systematizing your conceptual values?

Also - what point were you trying to make there, amidst all those extraneous syllables and $10 words?

It doesn't really address the accusation that the people who comprise the 'making money side' are behaving in an inhumane fashion.

 

[sandorski]

How does that differ from reconsidering your system of value concepts, or reconceptualizing your value considerations, or revaluing your conceptual system or re-systematizing your conceptual values?

Also - what point were you trying to make there, amidst all those extraneous syllables and $10 words?

It doesn't really address the accusation that the people who comprise the 'making money side' are behaving in an inhumane fashion.

The Ayn Rand in him is strong. That's where the error starts.

 

[whm1974]

once you've spent the money to create the IP to formulate it.

IP is just another example of Artificial Scarcity. Especially when the For Profit Business owning said IP received large tax breaks and other Government benefits to develop the IP in the first place!!!

 

[Moonbeam]

Didn't the Egyptians figure out they needed to store grain for a lean years?

 

[Moonbeam]

Didn't the Egyptians figure out they needed to store grain for a lean years?

And what about noblesse oblige

 

[whm1974]

Didn't the Egyptians figure out they needed to store grain for a lean years?

And what about noblesse oblige

From Wikipedia on that practice:
"Noblesse oblige, while seeming to impose on the nobility a duty to behave nobly, conveniently provides the aristocracy with an apparent justification for their privilege. This argument is "as nobles, we have rights, but we have duties also; and such duties thereby validate our rights". By contrast, jurists such as Dias and Hohfeld have pointed out that rights and duties are jural corelatives, [4] which means that if someone has a right, someone else owes a duty to him. This reasoning of Dias' was used in Murphy v Brentwood District Council (1991) to disapprove Lord Denning MR's judgment in Dutton v Bognor Regis Urban District Council (1972)."

Quite similar to the insulting nonsense of The White Man's Burden.

The White Man's Burden - Wikipedia

en.wikipedia.org

 

[Atreus21]

Pick your poison. High prices or shortages in a crisis. Idealism doesn't change market conditions on the ground - product X is in high demand as supplies are low. Therefore product X is highly valued.

 

[MagnusTheBrewer]

I'm curious if the proponents of straight capitalism who believe supply and demand has ANYTHING to do with pricing today have any other cognitive impairments?

 

[HomerJS]

Looks like those who are defending Price Gouging are forgetting what Artificial Scarcity means. Large Corporations, such as Apple intentionally make fewer units in order to drive up demand and hence prices. Usually this is with done with Luxury Goods and Monopolies, even with goods that are not that hard and expensive to make.

Artificial scarcity - Wikipedia

en.wikipedia.org

I suspect Popeye's did it with those damned chicken sandwiches. Prompting people to do stupid things resulting in a death.

 

[HomerJS]

The woman taking all the toilet paper was practicing capitalism. Socialism would dictate she allow the other woman to buy a pack.

 

[sandorski]

Has anyone figured out the TP obsession? It has been happening up here as well.