"If you will literally die if you refuse to pay a merchant a high price for water, the last thing you want is for anyone to distort the knowledge and dampen the incentives necessary to accurately inform and powerfully entice suppliers to rush more water to the region. Yet distorting such knowledge and dampening such incentives are exactly what prohibitions on 'price-gouging' do." #QotD

"High prices, as painful as they are, are not as painful as the alternative, which is doing without the goods altogether – and in your example this alternative is fatal. If you will literally die if you refuse to pay a merchant a high price for water, the last thing you want is for anyone to distort the knowledge and dampen the incentives necessary to accurately inform and powerfully entice suppliers to rush more water to the region. Yet distorting such knowledge and dampening such incentives are exactly what prohibitions on 'price-gouging' do.
    "The bottom line is this: so-called 'gougingly' high prices are evidence not of a market functioning poorly but of a market functioning well. Further, only by allowing the market to function in this way will more-abundant supplies, lower prices, and other ‘normal’ conditions be restored as quickly as possible. As beneficial to humanity as an unimpeded price system is in normal times, it is never more vital than in desperate times such as those caused by natural disasters."
          ~ Don Boudreaux, from his post 'Still More on So-Called Price Gouging'
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