View source for Libertarians who know nothing about economics, part 2510

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[[Category:Eli]]
[[Category:Matt Zwolinski]]
[[Category:Price Gouging]]
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{{DES | des = Eli tears [[Matt Zwolinski]] a new asshole.  "So, please, somebody tell me how libertarians got their reputation for being economically-minded. These people don't know shit about economics. Their economics is the kids'-menu version that comes with a handful of crayons and a paper placemat."  | show=}}
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As if to answer my challenge, "Bleeding Heart" Libertarian Matt Zwolinski recently gave his two cents (pun incoming) on COVID-19. His (predictably idiotic and barbaric) opinion? Price gouging is great and pandemics don't change that.
"In essence, 'price gouging' is simply a pejorative way of referring to the use of market prices to allocate scarce resources. It is rationing according to supply and demand.

Defining price gouging in this way has the advantage of making the moral problem clear. Price gouging occurs because resources are scarce – because there aren't enough goods to meet people's needs. Banning price gouging doesn't do anything to address the underlying scarcity – in fact it might even make it worse, by destroying the incentives to bring new supply to market...

In the end, allocation by market prices has two advantages over just about any other system of distribution. It leads people to cut back on their demand – especially those people who need the good less, and are therefore willing to pay less for it. And it encourages people who have excess supply – people who stocked up, people from non-affected communities, and producers who might be able to make more – to bring that supply to where it is needed most."
As usual with Zwolinski and his glibertarian goons, this is so wrong that nearly every sentence is either empirically broken, logically crumpled, or just plain nonsensical. Observe:

"Price gouging" is NOT "simply a pejorative way of referring to" prices. Prices are everyfuckingwhere. When someone sells a bottle of water for a buck, there's a price there; when someone sells that same bottle of water for a hundred bucks, that's also a price. Only one of those is ever referred to as "price gouging." Zwolinski is either lying here or being so amazingly stupid that he should practice socially distancing permanently.
Price gouging is also NOT "rationing according to supply and demand." Supply and demand are both real-life variables. A price, on the other hand, is a made-up number. You'd think that this distinction would be overwhelmingly obvious to anyone who has studied economics, but that just goes to show how brain-damaging libertarianism is.
That having been said, price gouging is rationing - that's the part that Zwolinski isn't wrong about. But having admitted that, how can libertarians then weep and moan about "death panels" and shit when it comes to public rationing schemes? Think about it: who would you rather have rationing your medicine: a democratically elected public servant or just whichever random shithead got to the Costco before you did?
Zwolinski has no fucking idea what "the moral problem" is, as is evidenced by the next thing he says. Price gouging ABSOLUTELY DOES NOT happen just "because resources are scarce." Again: resources are scarce all the fucking time. For example, showings of popular movies very frequently sell out. But do the movie theaters start charging more per ticket when they get close to their seating limit? No! Likewise, do department stores charge more for the last shirt or pot or pillow in stock? No! Price gouging, therefore, cannot possibly be a consistent result of "scarcity." In arguing this way, Zwolinski pretends (and I cannot emphasize that enough: he pretends, just as a child pretends that a cardboard box is a spaceship or that their teddy bear talks to them) that markets are machines that operate without human decisions or responsibility - that, in other words, you can predict what a price will be just by looking at impersonal factors. But that's not how markets work. Humans decide what to charge for goods and services, and as a result humans are responsible for those prices.
If Zwolinski really thinks that the only "incentives to bring new supply to market" are related to price-gouging, he's out of his fucking mind. Again, really stop and think about what he's saying. Those movie theaters that don't price-gouge Marvel fans: how do they know which movies to keep for a long time and which to switch out (i.e., how do they modulate their supply)? How do book publishers know which books to reprint if they, too, hold their prices steady over time? The answer is dead simple: they just produce more of the stuff that sells more. This is econ-101-type shit, and yet Zwolinski gets it completely wrong. So: how will hand-sanitizer companies know to make more hand sanitizer during a pandemic? Well, one, hopefully their executives will be smart enough to know what "pandemic" and "hand sanitizer" mean. But if not, two, people will buy more of their shit, which is sufficient reason in and of itself to produce more.
And as if that weren't bad enough, Zwolinski's next utterly batshit claim is that it's good for "people to cut back on their demand" of health products DURING A GLOBAL PANDEMIC. This is the type of thing that I have in mind when I talk about "glibertarianism": you just can't explain Zwolinski's less-is-good attitude without painting him as a brainless, blithering dipshit. The present moment is exactly the wrong time for people to "cut back" on their use of hand sanitizer, toilet paper, and other health and hygiene products that have been price-gouged in the past week or two. If this highly credentialed clown really believes otherwise, then he should feel free to lead the charge himself by refraining from ever washing his hands with the scarce good of soap. Let's see how long he lasts.
Finally, Zwolinski ends his article with a veritable fireworks show of sophistic anti-logic:
"[P]eople who need the good less" are not automatically "therefore willing to pay less for it." This may come as a surprise to you if you've been swallowing the potent hallucinogen of libertarian propaganda, but rich people very frequently purchase things that they don't need!
Willingness to pay is not the only factor that goes into determining what people will pay. If I'm charging ten bucks cash for a single square of toilet paper and you only have five bucks on you, it doesn't matter what you'd be willing to pay. Very frequently (and especially frequently in market/capitalist economies), people are willing to pay goods and services that they mathematically cannot afford. As such, it's wildly irrational to pretend that "willing[ness] to pay" is the only relevant factor related to price gouging.
Ergo, when "people who have excess supply" decide to engage in price-gouging, they have no guarantee that their sales will happen "where [the item] is needed most." Being unable or unwilling to pay for X is not the same as not needing X; likewise, being able and willing to pay or X is not the same as needing X. There's simply no logical connection whatsoever between Zwolinski's premises here and his conclusion. Instead of bridging the gap, he's just stepping out into thin air.
So, please, somebody tell me how libertarians got their reputation for being economically-minded. These people don't know shit about economics. Their economics is the kids'-menu version that comes with a handful of crayons and a paper placemat. Zwolinski and the rest of the pro-price-gouging "Bleeding Heart" Libertarians are congratulating themselves for managing to color inside the lines, but they're completely incapable of realizing that they're coloring in a cartoonish fantasy. Saying that libertarianism is based on economics is like saying that alchemy is based on science or that numerology is based on math.

I keep hoping that one day we'll break out of this collective delusion, this spurious notion that right-wing economics are even passingly realistic. But I guess it's gonna take more than a worldwide crisis in order to make that happen.
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