• David Cusimano

How To Get More Hand Sanitizer, Milk, And Toilet Paper On The Grocery Shelves

Prices serve a far more important role than simply telling us how much cash we need to part with in order to receive a good or service. They form the backbone of the entire market system and act as signals to entrepreneurs of what value society is placing on particular resources at any given time. By voting with their wallets, community members broadcast clear and timely information about what they want and need.



The political current consensus is that prices should be prevented from increasing too much during a crisis. While these policies are often well-intentioned, they remove the critical signals needed by both consumers and producers to make decisions in the best interest of society.


Consider hand sanitizer, the price of which has been increasingly scrutinized during this crisis. People around the world have been hoarding it, making it difficult or impossible to find in some areas. Nervous citizens quite naturally understand the importance of this product and want to make sure they have plenty of it. With prices forced to remain low, those who can get to the stores the fastest have little economic incentive to not stock up. Those who aren’t as swift (who coincidentally make up a large portion of those who are most at risk should they contract COVID-19) are left with empty store shelves. Once hand sanitizer stocks out, those who really need it can’t purchase it - at any price. Even if a desperate person deems $50 per bottle a lower cost than the cost of contracting the virus, they have no options. Our well-intentioned anti-price gouging policies have left them with nothing.


And because producers who might currently be supplying ethyl alcohol for other, less-needed uses (such as alcoholic beverages) aren’t able to be compensated for the expense of converting their plants or abandoning their existing customers, many of them aren’t able to shift gears – even if they might like to.

If, however, we allow the price to fluctuate freely, those who are able-bodied and make it to the stores first will have some challenging decisions to make.

The inevitable outcome is the emergence of a black market as desperate buyers and sellers attempt to skirt the rules and transact anyway. Our attorney generals then run around making criminals out of people who were attempting to serve the needs of the community and no one wins.


If, however, we allow the price to fluctuate freely, those who are able-bodied and make it to the stores first will have some challenging decisions to make. When faced with hand sanitizer at $20 per bottle that was previously only $2, they will be a lot less likely to clean the shelves out. They will be much more likely to grab only the amount their family needs, thereby leaving additional supply for those who come behind them.


In addition, producers of alcoholic beverages will quickly notice that prices of hand sanitizer are rising and start converting their production. This increase in production will not only increase the amount of hand sanitizer available in the world, but also mitigate the rise in prices.


Market prices allow us more products and a more just form of rationing than any other method. In order to keep food on our shelves, we need price signals more than ever - not less.



Also published in New Orleans City Business: https://neworleanscitybusiness.com/blog/2020/04/05/how-to-get-more-hand-sanitizer-milk-and-toilet-paper-on-grocery-shelves/


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