It absolutely is evil. Buying out local inventory and selling it for a profit to the same people who would have bought it anyway isn't doing anyone a service. It's not "adding liquidity" to the market. It's not bringing more supply. It's adding a pointless middleman to a transaction that would have happened anyway - it's an inefficiency.

It would be a different matter if these people were actually sourcing masks from places where they are plentiful, and sending them on to places where they are not. Right now, masks are in short supply everywhere.

Theoretically, its the stores that should be raising the pricing immediately when panics like this happen.

It would dissuade people from buying more than they need, possibly in hopes of reselling, as the prices would already be elevated.

So only rich people deserve items demanded in a panic?

The proper control is limit purchase per person per day. Raising prices on things like masks in a viral contagion like this is unconscionable

No one said anything about only "rich people" "deserving" anything. If you draw the conclusion that only "rich people" will have access to something if the price is higher (notice they didn't specify how much) that's fine, but don't go putting words in other people's mouths.

> but don't go putting words in other people's mouths.

It's not "putting words in other people's mouths" to explicitly spell out the direct consequences of what they're saying. When the price of a good spikes to several times its everyday market price or even higher, it's reasonable to assume that it's gone up by enough to make it inaccessible to a meaningful portion of the usual customer base.

For a disposable item like face masks, consumers would gladly pay 3x the pre-pandemic mask prices for their own personal use. The buyers who aren’t willing to pay 3x are hoarders and resellers, because there’s no guarantee enough people will pay 5x or 6x for it to be worth it.

If the manufacturer prices are allowed to rise, the profits incentivize increased manufacturing. If the prices aren’t allowed to rise, the rationally selfish strategy is to hoard the entire stock of any non-gouging manufacturer and sell the product on a gray market like Amazon where anti-gouging rules are poorly enforced. The profits obtained by resellers could have instead gone to manufacturers, encouraging more people to become manufacturers until prices return to normal.

Nobody wants masks to be unavailable to the poor. The disagreement is what measures will best make them available to everyone, the poor included.

It’s reasonable for people to disagree on whether relaxing price controls would achieve this end. But to say that free-market advocates believe the poor “don’t deserve” access to masks is as disingenuous as saying anti-gouging advocates believe the public “deserves shortages”, or that people who aren’t tenacious enough to find masks at any price in a hoarding-dominated environment deserve to die. Any sane person acknowledges both solutions have major drawbacks.

"Free market advocates instead believe the poor should get essential goods last, if there's still enough profit in it."

That fits your narrative, no?

Free market ultimately amounts to how much can we push people's capacity to suffer in order to profit the Capitalists, can we raise the price of water, can we raise the price of food, can we work people 20 hours a day, will they still work if they can't afford clothes, can we psychological convince them not to riot and so remove even more of their humanity; will the poor still work if life-expectancy is down to 60 years, howabout 59?

It's the literal and direct point of rising the price. If an item is sought after by everyone, then rising the price primarily cuts off the least wealthy part.

Raising the price does not "primarily" cut off the least wealthy potential buyers, that is just one of the effects. Much more important is that it prevents people from hoarding, which is by far the most common result of prices being drastically lower than they ought to be. Leaving the prices low predictably causes shortages, which shut out virtually everyone from purchasing the masks, including the microscopic percentage that wouldn't be able to afford the price increase on an item that usually costs pennies.

You didn't answer why imposing limits on how many each individual may purchase isn't a reasonable solution. It prevents hoarding and keeps prices normal. Sure, the manufacturer or retailer doesn't profit, but if they were happy to get price $X pre-panic, why are they not happy to get the same price now? Their costs haven't changed (yet).

It just forces the people who corner the market to employ agents who buy the products in smaller batches. It helps a bit but doesn't fundamentally change the dynamics.

It does though. If you employ agents, you have to pay them, which increases your costs. If you're buying for yourself, you only pay for the cost of the item. So this would do exactly what everyone is recommending per economic theory - raise costs for scalpers, keep them sane for everyone else. Purchase limits provide an easy selection mechanism between scalpers and others.

Also, in a situation like this, how many people would choose to be an agent for someone else, versus buying for themselves?

All the waiters who are out of their jobs and urgently need money.

Cool. So costs go up only for scalpers and the unemployed get some cash? Sounds like a win-win to me :-)

Give poor people money, if you want to help them. Not queues and black markets.

It's usually quicker and easier to determine how much each person reasonably needs to get them through an emergency situation, than to predict how high the price could be driven by hoarders and scalpers. And handouts to poor people to cover the scalper's surcharge will quickly result in the scalpers charging that much more—cf. college tuition, for a non-emergency example.

Good point. A discussion about relative elasticity of demand and supply for college tuition, rents and eg face masks would be enlightening. Most of higher education is about signalling.

Hoarders and scalpers don't drive up the prices, they just reveal a market clearing price. Attempts to restrict market clearing mechanisms make scalpers and hoarders spring up in the first place.

In a less restricted economy, producers of masks would capture the price increases. And that would serve as a good incentive for them to keep extra capacity around.

If your ration coupons for face masks were freely tradeable, the resulting system wouldn't look that much different from letting the price of face masks themselves freely fluctuate; and giving people the right amount of money. (It would still be a bit more awkward in comparison.)

Then you just drive prices up and put the poorest non-poor people into the same class as the poor.

Higher prices encourage more supply to spring up, and economizing on use.

Your remark is right for things like land that's in fixed supply.

If there are 10,000 masks in stock but 100,000 people want to buy a mask, how do you distribute the masks to people? In a free market the price is determined by supply and demand, such that only 10,000 people will be willing to pay the higher price of the mask. Socialism doesn't work in this case, you just can't satisfy everyone's need for masks.

I'd argue that people shouldn't even buy masks during pandemics and they should be reserved for medical staff who actually need them and know how to use them properly.

"From each according to their ability, to each according to their need", as the maxim goes.

You distribute according to highest need. Which is what you said.

It's strange that you said "socialism doesn't work here" and then in the next sentence gave the socialist solution "distribute according to the greatest need"; which here would be medical staff.

The difficulty with that is human greed. Capitalism embodies human greed and turns it, with careful intervention, towards a relatively useful force (when resources are limitless!). Communism tries to fight human greed, which is why it can't be imposed and must be adopted. Communistic systems readily get overrun by capitalistic actions - under war-time rationing, for example, black markets rise up ... one greedy person ruins the whole system, one generous person does not.

People should have to give up greater degrees of utility to obtain something scarce and valuable, yes. If someone rich gives up more currency to get something then so be it - they built up that currency by creating value for others in the first place.

>they built up that currency by creating value for others in the first place.

t. nonessential worker

Regardless of if they make a profit, they saw a discrepancy between current prices and what they considered more accurate prices and to the extent they made a profit they were correct. There is still the huge benefit that now these masks will be purchased in more reasonable quantities by customers, ensuring more people get the masks they need.

> There is still the huge benefit that now these masks will be purchased in more reasonable quantities by customers, ensuring more people get the masks they need

Lol, no way. The need is for medical staff. These will either sit in some gouger's garage waiting for a premium price, or be needlessly used by someone affluent. Neither which is "need".

I would perhaps grant you "evil", but "bad", definitely not. This is one of those rare things economists seem to agree on. [0] The scenario you described would be unlikely if price gouging was legal/encouraged as the extra profit would largely be captured higher up in the chain (e.g. by the production factories). This would incentivize the re-purposing of factories to manufacture the high demand products, discourage hoarding, etc.

[0] https://www.econlib.org/archives/2017/09/a_poll_of_econo.htm...

Yes. It would also encourage exactly the kind of resiliency that many commenters here think the government should mandate by law.

If you can legally sell your masks in time of crisis for a hundred dollar a piece, that's a great incentive to keep some spare capacity around that doesn't rely on global supply chains. Price controls dull the edge of that incentive.

(If more people were allowed to raise prices and thus kept spare capacity around, prices wouldn't rise so much in the first place.)

It is truly painful to see how little people seem to understand or appreciate the living organism that is human action in the aggregate. Large surges in demand which are inevitably met with price increases are signals to other parts of the organism to send goods where they are needed. Higher prices encourage a balance of needs and responsible budgeting so individual cells don't simply take all that is available to the detriment of the organism as a whole.

> Higher prices encourage a balance of needs and responsible budgeting so individual cells don't simply take all that is available to the detriment of the organism as a whole.

Aren't you making a fairly unreasonable assumption that need is also accompanied by ability to pay elevated prices?

Not at all, hence the word "encourage" instead of something more absolute like "enforce". The distinction between a "want" and "need" is very tough to make beyond physical reality bound calculations of measurable requirements for survival like calories or materials required to build a shelter that could keep a human alive under adverse environmental conditions. I mean nothing specific like that by the use of the word "need".

The distinction between "want" and "need" can be made in practice. Doctors have been publicizing what they know about risk factors for COVID19. If you don't fall into one of those categories, you're in the "want" crowd, not the "need" crowd. Which of those classifications you fall into has no correlation to your ability to afford personal protective equipment.

Price gouging can easily make a scarce critical good unobtainable to poor people who need it before the price is high enough to discourage all the rich panicking hoarders/preppers.

That works only if there's a reasonable way to meet the increased demand. The prices go up, which increases more manufacturing and more entrepreneurs moving inventory from different areas to ones with need.

In emergencies like this, there isn't enough supply available anywhere to meet demand. The manufacturers can't scale fast enough - and even if they could, they're often unwilling; scaling up has large up-front costs, so it's not worth doing if the demand is going to evaporate before they can recoup their costs.

The right solution here is for the governments to start issuing very large orders, thus ensuring the manufacturers can scale up without worries, while distributing the masks to everyone in an equal fashion. And jailing the price gougers for profiteering off global emergency while we're at it.

> In emergencies like this, there isn't enough supply available anywhere to meet demand

In the presence of price gouging laws perhaps, but not in general. I of course acknowledge the overhead cost of retrofitting existing manufacturing setups to produce masks, but that doesn't mean they can't still turn a profit, especially if they are not prevented from selling internationally by well intended but misguided laws.

> In the presence of price gouging laws perhaps, but not in general. I of course acknowledge the overhead cost of retrofitting existing manufacturing setups to produce masks,

Price gouging laws do not change the underlying facts of how long it takes to spin up new production lines. In an emergency, suppliers cannot respond quickly enough, by definition. The problem to be solved is how best to allocate existing stocks and production output, not how to incentivize new producers.

> Price gouging laws do not change the underlying facts of how long it takes to spin up new production lines.

Of course they don't. What they do accomplish is preventing prices from rising quickly enough to justify new production lines. It really comes down to if manufacturers think they can make enough to cover the costs of changing production lines to the emergency good, then turning them back, and then some. This is compared to how much they make doing what they have always done. Price gouging laws lower the profits they would make.

> What they do accomplish is preventing prices from rising quickly enough to justify new production lines.

How does this matter, if either way the new production line won't be up and running until after the emergency is either over or has been seriously exacerbated by poor allocation of goods? It seems like you're still trying to pretend that markets are efficient and can always respond quickly, and that's simply not true.

Even if it can't increase supply it will decrease demand (hoarding). If the prices is higher people will only buy what they need rather than buying all of it out.

Yeah. When supplies can't meet demand, raising prices serves to discourage people from buying more than they need or buying just to resell.

So would limiting sales per person and keeping the price affordable.

On paper. What it really does is discourages the poor people from buying, so the price gougers have more supply available to sell to the panicking wealthy hoarders.

That works fine for non-essential goods. New mobile phone - sure. But once we're in a "rich asshole can buy out the supply of life-saving equipment by outbidding hospitals" territory, any talk of market efficiency should go out of the window. If we don't do that, we may just as well start analysing market efficiency of slave ownership - market numbers more important than people.

> But once we're in a "rich asshole can buy out the supply of life-saving equipment by outbidding hospitals" territory, ...

Price increases also discourage the wealthy from buying more than they need. There is no doubt that the effect of higher prices matters less to them, but it still will encourage them to buy less on average. There is also a very small chance that a "rich asshole" purchases much more than they need, but this is the exception, not the rule.

> ... any talk of market efficiency should go out of the window

Quite the contrary actually. Emergencies are at least one of and potentially the most important case where the (on average) efficiencies of the market are needed.

> we may just as well start analysing market efficiency of slave ownership

Slave ownership is by definition extremely inefficient. That's obviously not to say that someone couldn't treat humans like cattle and turn their investments into a profit (as we are all unfortunately aware of), but if you consider the system as a whole including the alternatives (and their impacts across the economy) that could be pursued by the slaves the entire thing is a big net negative for society to the benefit of the few (slave owners). Slavery is not only evil by virtually everyone's definition of morality, it is also just plain stupid.

Sure, in this case the rich asshole is the federal government. Unfortunately.

https://www.youtube.com/watch?v=9jEMgLsVBvw

You are 100% correct. First I don’t think there’s anything wrong with someone making the right choices to obtain something that then becomes valuable at some other point. It’s not bad or evil at all.

But it’s also the optimal solution to handling demand for numerous other reasons. See https://fee.org/articles/let-prices-rise-to-combat-the-coron...

> But it’s also the optimal solution to handling demand for numerous other reasons. See https://fee.org/articles/let-prices-rise-to-combat-the-coron....

Markets are not efficient. Especially not on short timescales where even FedEx deliveries aren't quick enough to reallocate supplies and keep shelves from going bare. And especially not during an emergency that is very obviously triggering widespread irrational behavior. And especially not when consumers are working with insufficient information, because literally nobody on earth knows to a high degree of certainty or precision just what degree of risk we're facing.

If only we could convince everyone that our product is so hot, it will get you laid.