14 October, 2004

Price Gouging Saves Lives

I'm continually blown away by the level of macroeconomic ignorance in this country. Let's take a look, through the prism of Economics 101, how 'price gouging' is SAVING LIVES during this flu vaccine shortage:

First, a refresher- when supply is sufficiently meeting demand, the resulting price is what we become accustomed to as a 'normal' price for any good or service. When a shortage of flu shots occurs, the price necessarily has to go up- it's literally a matter of life and death...

I am a reasonably healthy adult. I don't normally take flu shots, but let's say that I want one now. Because the price has gone higher, and I really don't need one anyway, I won't be getting a flu shot this year. That flu shot that would have been used on me will now go to a person who may be at high risk- someone who can't afford NOT to get the shot. Another life is saved! Isn't it interesting how a free market, complete with selfish, greedy suppliers can allocate resources exactly where they need to be to produce the greatest benefit for society?

Of course, the socialists among us will cry about some people's inability to pay for the vaccine, but that's another matter. Payment is up to the individual and/or private charities... A topic for another day.

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