Forget Price Gouging: Businesses React Altruistically To Disasters

Forget Price Gouging: Businesses React Altruistically To Disasters


They’re calling this an almost unfathomable
amount of rain hitting this part of Texas, guys. With natural disasters in the news, the country is being treated to a real-time
debate over the sins of so-called price gouging, If you’re price gouging in our state, I’m
going to go after you. And I will shame you on national TV. Defenders of gouging, including many libertarians, stress that price hikes force customers to
prioritize their purchases while incentivizing suppliers to bring necessities
to market. Marking the price up, selling it high as hell. So if jugs of water are selling at $10 a gallon, businesses have a motivation to truck them
in. One of the advantages of letting prices rise
is it forces people to make the tough decisions. And at that price, no one’s going to use
that water to wash their cars. Critics, however, say that it’s immoral
to use the price mechanism to meter out essentials in a crisis. You know we’re gonna now see people coming
in from other states, trying to sell generators for a thousand dollars
to take care of- you know to hurt people in need. It’s disgusting, if anybody price gouges this is not the time to take advantage of
our neighbors. Yet both sides ignore a more-important reality: Local and national businesses routinely give
away goods and services much more efficiently than public-sector responders
or charities can manage. We saw what was happening in Florida we thought what could we do to help our neighbors
in Florida as well. In the wake of Hurricane Harvey slamming Texas, businesses pledged over $72 million in aid, with over three dozen giving more than $1
million a piece. Airbnb used its home-sharing network to set
up places for people to stay, and the crowd-sourced mapping app Waze helped
the displaced find shelters. Walmart, the left’s favorite corporate bogeyman, pledged more $20 million and brought water
and food to the needy. During Hurricane Katrina, the world’s largest
retailer trucked in relief long after FEMA convoys stopped running. We will also match those donations two to
one up to ten million dollars bringing the whole total to thirty million. Private sector aid gets less press than empty
shelves and gouging accusations, but it also makes good business sense. In some cases, price hikes during a crisis
are appropriate, but most retailers know they’re better off
showing that they care about their customers and aren’t out to take advantage of a bad
situation. Successful businesses safeguard their reputations. In The Wealth of Nations, Adam Smith wrote that he had “never known much good done by” people motivated by charitable aims,” but providing aid in disasters is every bit
as much a part of the free market as more obvious forms of profit seeking. If critics and defenders of gouging are really
interested in creating a better society, they’d do well to help make this part of
the Invisible Hand visible to all.

45 Comments

  1. dondoes969 says:

    Logic takes a back seat when lives are at stake. Not a good thing, but that's how it goes.

  2. Flynn Parish says:

    I don't get how people get to be elected or give advice on TV if they fail economics 101.

  3. Brian Long says:

    Price gouging laws kept hot water heaters out of the area affected by Hurricane Sandy. It took over a month for us to get one, because no business in their right mind would go through the trouble of delivering to NJ for the same price they can sell it for in their own area.

  4. Daniel Harvey IV says:

    Lol…..just giant tax write offs. Still glad they helped tho

  5. Paul Emge says:

    The one thing that really struck me was the statement from the woman on Foxnews:
    "You know we're gonna now see people coming in from other states trying to sell generators for a thousand dollars to take care of, you know to hurt people in need"

    She was right at first , when she said take care of, but changed it. So now nobody has a chance to get those generators from other states.

  6. Lance Keen says:

    gov can thugh

  7. 2VNews says:

    It is visible and talked about. You are fighting a straw man, sorry to say.

  8. Santiago Bron says:

    seriously

    talking about economics to adults is

    like talking about sex ed to kids.

  9. Ano Nony says:

    Government ignoring the reality of supply and demand? Not surprised in any way.

  10. Ano Nony says:

    People say we need things like planned Parenthood but as soon as their funding is cut charities like bill gates' step in and find them. Proof that the private sector can do good and functions more efficiently than government

  11. dahlberg31 says:

    Businesses are not acting "altruistically." It's actually illegal for them to do so. The donations comes from their marketing budgets and tax deductions. I do agree that some to act very efficiently. Though that's not universal.

  12. Romeo Calmo says:

    I just got a handjob from the invisible hand

  13. nicethugbert says:

    So your argument is that someone's charity justifies someone else's price gouging. BWHAHAHAHAHAHHA…………ReasonTV has no reason.

  14. banderfargoyl says:

    No, Nick, price spikes are not "sometimes appropriate"; they're always required when critically needed supplies are scarce.

    Local retailers don't spike their prices; they run flat out of stock and so are completely useless in emergencies. This behavior is understandable, but it's hardly commendable.

  15. Emmett Turner says:

    Reminds me of how NCR (National Cash Register) helped in The Great Dayton Flood of 1913. They supplied boats and shelter and aid to save countless lives. Many say that they only escaped a devastating Sherman Act Antitrust judgement due to the goodwill they fostered. The reputation benefits are tangible enough to incentivize.

  16. Projecto Patria - RD - RAMFIS 2020 !! says:

    #weathermodification

  17. Santiago Bron says:

    I wonder how much socialist organizations give.

  18. Eileen the Crow says:

    Price gouging IS GOOD TO GET RESOURCES WHERE THEY ARE NEEDED MOST.

    Yet the politicians are ok spending far more taxpayer dollars to get artificially "cheap" products in much slower to less people. Logic.

  19. Eileen the Crow says:

    It's better to have no options than overpriced options where they are needed most.. apparently. -idiot virtue signaling

  20. jumbowana says:

    This video would get a million views if you had the money to spend on a nice suit and haircut/makeup.

  21. sellery1803 says:

    It's head dizzying how many people don't understand, or even have any idea about how prices function

  22. pavelzaitsev says:

    Except Amazon.

  23. Troll With A Purpose says:

    Walmart has their own supply chain, Uber is a go if they get gas, AirBnB is good if the property is dry and accessible. Local businesses that sell goods must pay higher rates as they don't have the negotiating power of Walmart and have to pay more for transport to get irregular shipments in plus higher rates for reroutes, hazard and higher rates to area in general. Also, most WM I've seen have on site natgas or diesel generators, local stores will be paying higher for gasoline powered smaller generators.

    The comparison is apples and oranges.

  24. Donnievil says:

    It's not altruism…it's public relations. Be good to people when things are bad and maybe they'll favor your business more when things are good.

  25. AT Fly says:

    Hurricanes are emergencies , should we not donate money to hurricane victims because people won't prioritize their money on the flooded houses? I doubt suppliers will be discouraged from sending goods to an area when the demand is so high. It will be bought regardless of price, so it would be better to let the victims be able to afford things that they need . It is an emergency and should be treated as such. After the emergency is over, you can sell things for whatever you want . Imagine if doctors jacked up the prices after a cold winter. We gota be realistic here

  26. Maltava says:

    This quote just shows the extent of ignorance or lack of reason among those advocating against this.
    "You know we're gonna now see people coming in from other states trying to sell generators for a thousand dollars to take care of, you know to hurt people in need"

    Firstly, importing a $250 generator from a different state into disaster stricken area and charging a thousand dollars is not price gouging. Hell I wouldn't do it for that price and neither would most people. That is a steal for the buyer.

    Secondly, that generator is needed and obviously someone can afford it at that price or it wouldn't sell. So now someone that needs a generator more than they need a thousand dollars has one.

    Thirdly, without that man importing that generator you would have and even more severe power shortage and no one around to fix the problem. If this were encouraged you might actually even see the inability to overcharge because so many people would see the opportunity that importing needed goods offers. That influx of supply could possibly outstrip the demand for many commodities. At any rate it would be significantly better for the people in those areas to have option to buy these products rather than a guarantee to go without completely.

    Ffs this is not that complicated. Attempting to understand how someone could hold a position this idiotic is giving me a headache.

  27. LibertyChive says:

    Supply and demand doesn't care about feelings

  28. Mark Stouffer says:

    Great video, but major failure in the title, trying to justify it as altruism. All someone has to do is show that they may have benefited; then it's not altruism, it's self interest. It also encourages to individuals to operate at a loss, with nothing to show for it, which is not admirable. If it were, the attorney general would be right; Chevron should not be concerned about any of their investor's self-interest. Altruism would also encourage the people who receive aid, to be selfless and pass it on to someone or something less fortunate. That's why the concept of altruism is such a regrettable disappointment.

  29. Joe Marks says:

    Price gouging is hyperinflation, is immoral, but is mandated from Washington DC. They also create the conflict over immigration and drugs by prohibiting people from trading freely and moving around. Milt Friedman and George Carlin predicted many of the problems we still have in America, and a negative income tax is superior than more welfare waste.

  30. AeroMatter says:

    I saw the National Guard out here in FL trying to pass out bottled water for free while businesses were following Basic Economics and selling it for the reasonable gouged price. Naturally this upset me so I went up to the guy in charge of handing out the water and asked him why he was violating the NAP. The moron had no idea what I was talking about and the big government shill had the nerve to walk by me and continue boot licking and pass out more water, again, for free. I then walked up to him again where he was handing some (probably poor) family the water and I quickly snatched the case from the mother's hands and obstructed the exchange. Both the guardsman and the family started freaking out of course. Kept saying statist bullshit like "Are you a psychopath?" and "I need that to live!" I had to tell them that we live in a free market and they had to buy their water at a fair high dollar price, and that nothing was forcing them to buy water and can choose not to so it's fair no matter what. They weren't having any of it, but the jokes on them; if they just read Adam Smith they would understand the tyranny they were participating in. It's too bad my ideological opponents are intellectually inferior to me, and just looking for a handout after a natural disaster. I'm glad Irma didn't kill this Libertarian because now I get to go back to my Friedman, Molyneux, and ReasonTV videos.

  31. LJ B, Jr. says:

    So businesses are praised when acting "altruistically" but price fixing is immoral? Which is it? It was mentioned by Adam Smith in the piece and he sounds pretty socialist to me.

  32. Brevet Howe says:

    Don't forget the 3 million in bitcoin that went to Houston to help buy supplies. given by some the bigger mining pools

  33. Billy Wardlaw says:

    I want to see a progressive's head explode when you explain to them how wal-mart is putting immigrant water-sellers out of work with its disaster-philanthropy.

  34. macsnafu says:

    Yes, businesses want to protect their reputations and generally do a better job of providing help in disasters. But it's still a wasted effort because many people will still hate businesses and profit-motivated companies, and governments and government agencies will still do their best to prevent private companies from helping.

  35. RadioFreeUtah says:

    That's ridiculous! Next they'll be saying that a corporation's "goodwill" is somehow a measurable albeit intangible asset that increases the company's value and can be shown on a company's balance sheet…wait, what? It is? Executives and directors alike have fiduciary obligations to responsibly manage goodwill like any other company asset? Huh, who'duv thunk it.

  36. Trepur349 says:

    "You know were now going to see people coming in from other states to sell generators for thousands of dollars to hurt people in need"

    Would you rather not have generators being sold?

  37. Joe Ciliberto says:

    Nick, I am confused. I applaud the noble acts of companies who step up and deliver the goods during and after disasters. You reported several examples in this piece. I can't see any of the large companies increasing the price of anything to cover their additional costs delivering to afflicted areas.

    Small businesses should be allowed to cover their additional costs, particularity transportation and labor and making up or business lost in their hometowns to respond to disaster areas.

    But I wonder, if Walmarts, HEB, Lowes, and others, in addition to the Government and the large and local charitable organizations are all pouring in help, there should be little need for a small company to make the sacrifice to sell needed items to sufferers of the disaster at higher prices, when normally priced or donated items are available.

    The difference is the person with noble intent and the real gouger. There are both play, opportunity temps both the noble and the scoundrel.

    You misappropriated Adman Smith's quotation – It refers to programmed aid by for profit businesses to aid the chronic poor, not to charitable response to disasters adversely effecting the working class.

  38. dkchen says:

    I love it how leftists are all of a sudden "realize" that people could possibly game the system when it comes to price gouging, but when it comes to entitlements they say … nobody will game the system.

  39. fishingolf says:

    I feel businesses can charge whatever the market dictates. However, if i see a business willing to capitalize on a natural disaster just to make a few extra bucks, i personally don't go back there. That's just my opinion. At the same time, I live in CA expecting a earthquake everyday. That is why i keep extra supplies so I will never be a victim of temporary price hikes. People who fall "victims" to "gouging" deserve to pay what they do. May be next time, they'll be prepped for it.

  40. spikesmth says:

    Price gouging is not an issue that can be treated in a binary manner. Some price fluctuation is good, for the econ 101 reasons (increasing supply, making consumers prioritize, as the vid states). But there are certain goods like water for which we have to set limits or price ceilings, or outright seize and redistribute gasp in order to save lives if the situation is grave enough. I think Reason misses the point when using corporate donations as an example of how efficient private enterprise is at delivering goods, they aren't expecting to make a direct profit from the donated merch. They may get a tax write off, and it's a big PR/advertising thing for them too which can indirectly result in more profit, but it is not because of gouging and the potential for more revenue. If they don't already, government (at any level) could reimburse these corporations at non-crisis market price after the event is over. Just saying, real life involves shades of gray, gouging is a natural behavior but that doesn't justify it when it violates civilized morals.

  41. SouthernInquirer55 says:

    But the Gasoline retailers immediately raised their prices on fuel they had in the ground under the pumps.. No one said or did anything about it. And HEB? yes, good stores and great people.. but let no crisis go to waste! their half-empty shelves retained all the old-dusty and off-brand items (at full price) that normally would have had discounts applied or been discarded. There's the millions they 'donated'.

  42. watchdealer11 says:

    Price hikes: $20 batteries so those in need buy them instead of hoarders It's a good thing, it helps, and "gouging" is a terrible description.

  43. Sheldon Cooper says:

    Supply and demand states that higher prices result in higher supply coming in. Instead the victims get greedy and demand free (lower priced) stuff, killing supply like in Venezuela, France, and Zimbabwe. Higher prices are painful, but it serves as a harsh lesson to be better prepared.

  44. Umberto Fournier says:

    makes sense

  45. HDaviator says:

    Price gouging laws should only apply to items that are most necessary. Water, baby formula, shit like that.

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