And sure enough, the waters were still rising all across the Houston area when the first such calls were heard.
We now need some method of rationing that limited and scarce supply.
When the municipal water supply is knocked out and people are dependent on bottled water, Worstall proposes: “We now need some method of rationing that limited and scarce supply over that increased demand.
Rationing by price is always the efficient way of doing this.” He argues that raising the price will encourage suppliers to flood the market (so to speak) with bottled supply.
Throw in that, with the electricity out, she might not even have access to cash at an ATM.
She might very well value that water at $7 a bottle, in principle.
If there’s no physical way to get a new supply of bottled water into some part of Houston, then allowing unrestrained price increases won’t produce a larger supply.
Retailers lucky enough to have a few cases in the back room when the crisis hits, however, will reap a windfall.
Another argument in favor of removing crisis-stage price controls is that they fail to accommodate the higher cost of getting a scarce commodity such as water or gasoline into the stricken market.
Perry and Worstall and other defenders of price-gouging would eliminate all controls, especially in disasters.