I once got into a long after-class argument with my econ professor about anti-gouging laws during disasters, and he genuinely told me that a superior option would be to drop massive amounts of cash over affected areas via helicopter (a literal helicopter drop) so that everyone could collect it and have the ability to purchase goods at their market value. I tried to point out that the lack of competition caused by a severe supply shock eliminates any upper constraint on prices, so a helicopter drop could just lead to local hyperinflation that would rapidly wipe out the money’s value, but he cut me off before I could get to it.
Pretty sure he had a PhD.
Okay, but that spike is only temporary, depending on just how difficult it is to get out there and just how regularly the government does this. If there is suddenly $200,000 laying around for buying water, then someone will get a boat or a truck and bring water.
No, what you really have to worry about is that some guy with a gun will just take it all to himself.
“Temporary” still matters, a lot, when we’re talking about access to water in a disaster zone.
They might hold out for it, though, and if it became a common practice then dudes would line up with trucks full of waters along the storm boundary, excitedly waiting to go, driving down the price due to the expectation that the seller would make less money later for anyone that could afford to wait a little longer.
It just ignores that one dude with a gun can get all the money for himself, which is a frequent thing we see with economic thought ignoring the realities of force even while implicit force is, though useful, the basis by which property can even exist.
