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[–] 1812-was-not-a-tie 0 points 1 point (+1|-0) ago 

Prices should be allowed to adjust to laws of supply and demand. There is a very simple write-up by Thomas Sowell which explains why not allowing prices to adjust in times of crisis is bad. Can't find the source, but it works like this:

There is a major environmental disaster. Therefore there is not as much water as usual. Water has become extremely scarce.

===> Some sort of rationing will take place.

There are many possible criteria to ration water:

  • You could keep the price at pre-crisis levels and sell it to whoever comes first. This person is likely to stock up with more than they need, because they know that water is scarce. At best they will distribute some of it to their friends and family.

  • You could have the government seize it all and dole it out as it deems fit. This comes with usual inefficiencies of government.

  • You could jack up the price to $42. This has the disadvantage that the poor will not be able to afford it.

But! Jacking up the price - which is really just respecting the laws of supply and demand - comes with a great built-in advantage. It utilizes the forces of the market to mitigate the crisis. The word will spread that water sells for $42 in Texas, and some profit-seekers will drive water down from Arkansas to sell in Texas. These characters may not be heroic rescuers, you may even dislike them, but the end result is that there will be more fresh water where it is needed.