Cato Institue/ IHS Seminar: Day 1

Wowowowow I have so much to say about the few hours that I’ve been here.

Never before have I been so immersed in a congregation whose sole purpose for congregating is a profound love for liberty.

Of course, I am always wary of the ability for such gatherings to become dangerously one-sided reinforcements — one of the attendees fromKyrgyzstan of all places who studied abroad for a year at Bard College said that he mastered English by engaging in classroom debates with his peers, who were predominantly socialists. The kind who would rise from their seats and applaud in affirmation of the college president urging the expansion of government oversight. I am aware that this Cato/ IHS gathering has the potential to turn into a libertarian circle jerk, so I will try to question claims that I feel are unsupported.

And one came up tonight, when we were discussing a lecture on price gouging:

While I understand the free market defense for letting price gouging in post-disaster scenarios happen (that such fluctuations in prices communicate necessary information to most quickly move resources to where they are needed), a moral question arises for me:

If we assume that a person will die without access to clean drinking water in 2-3 days, but it will take more than 2-3 days for outside merchants to enter the market (not because of incentive delays, but because it will take time to transport these supplies from outside the affected area), how can we justify that only the wealthiest (those who can pay the suddenly exorbitantly high prices) will have access to clean drinking water?

The response that the lecturer gave was that he “rejected the premise” of my question… but his explanation was unclear to me. He said first that in such a scenario, it would be hard for him to imagine a case where human altruism does not come into play — that those who are financially well-off would inevitably sustain those who are thirsty but poor. This defense I find pretty weak… given the amount of homeless people who are literally stepped over on the streets in our very own society.

He said secondly that he did not want to get into questions of morality, because these sorts of situations, where peoples’ lives are at stake, are too rare to guide general policy. But… the whole problem of price gouging occurs in rare disaster scenarios. And I don’t know, is it fair to say that economics and morality may not overlap? I agree that these two fields can exist theoretically in very separate realms of analysis and discussion, but when it comes to public policy, I think it is important to marry the two. It is intellectually irresponsible to ignore the moral implications of a theory you wish to actually implement in practice, isn’t it?

Perhaps a more logically convincing (if more emotionally sterile) response would have been: in such a post-disaster scenario, in the time before external supplies can be driven or flown in, the fact that not enough supplies exist to sustain everyone in the affected area will necessarily result in some number of deaths. Therefore, given that X number of people (Total Population - Number of People Sustained by Available Supplies = X) will perish, you might as well keep the death toll to that minimum number. This cap on the death toll be accomplished through price gouging, because a high price signals to external merchants to bring in extra supplies in the most expedient manner possible, thereby ensuring that with at most a short delay, the water supply will once again be adequate. Without the incentive of higher prices that result from gouging, however, supplies will not be attracted to the disaster area at all, thereby guaranteeing that even beyond the immediate 2-3 day waiting period, the water supply will be inadequate and many more than X number will die from dehydration.

This becomes an entirely utilitarian calculation, and I have never been comfortable siding wholly with either utilitarianism or deontology. That’s probably why even this defense, which is the best I can think of at this moment, still feels like we are forcing ourselves to accept the best of unsatisfactory options?