Ring of Conservative Sites Ring of Conservative Sites
JOIN!

[ Prev | Skip Prev | Prev 5 | List |
Rand | Next 5 | Skip Next | Next ]

Tuesday, August 02, 2005

The Goodness of Profit

In going through old papers, I found this gem from a speech by Walter Williams at Hillsdale College. He was discussing the social benefits of "windfall profits" and "price gouging" that is so hated by socialists. He provides this recent example of the public good that profit-seeking has for people:

In the wake of Florida’s Hurricane Andrew, windfall profits played a vital though unappreciated role. Plywood destined to be shipped to the Midwest, West and Northeast suddenly was rerouted to South Florida. Lumber mills increased production. Truckers and other workers worked overtime in order to increase the availability of plywood and other construction materials to Floridians. Rising plywood prices meant something else as well. All that plywood heading south meant plywood prices rose in other locations, discouraging “lower valued” uses of plywood such as home improvement projects. After all, rebuilding and repairing destroyed homes is a “higher valued” use of plywood.

Prices are information. That information is corrupted when government steps in to direct scarce resources away from their best use. The first in line certainly do well in that they purchase below the market rate. However, the result is misallocation of goods and the needy doing without too often.

Now socialism is fair because...?

10 Comments:

At 12:40 PM, Anonymous Anonymous said...

you must be having a slow news day at ettubloge!

 
At 2:15 PM, Blogger neal phenes said...

The Bolton thing was expected. So was the Air America rip off. The globe keeps on warming. No one wants me to write about the Sox keeping Manny. So I guess I can chill a bit.

 
At 2:23 PM, Anonymous Anonymous said...

maybe start a remedial economics section for middle schoolers and democratic congressional leadership.

 
At 5:28 PM, Blogger neal phenes said...

I have a chance of getting through to the middle-schoolers. The adults in Congress are largely bozos or jerks.

 
At 9:24 AM, Anonymous Anonymous said...

don't impugn bozo!

 
At 9:24 AM, Anonymous Anonymous said...

don't impugn bozo!

 
At 2:16 AM, Anonymous Anonymous said...

What a great site »

 
At 1:21 AM, Anonymous Anonymous said...

Enjoyed a lot! »

 
At 2:57 AM, Anonymous Anonymous said...

That's a great story. Waiting for more. film editing schools

 
At 4:08 PM, Anonymous Anonymous said...

Enjoyed a lot! 1991 bmw 325i transmission check Alternate to effexor xr car wax consumer reports Venlafaxine formulation software affiliate program Audi a3 sportback dsg italia Cheap rate motel 6 marseille Alfa romeo for sale uk Blendamed white strips Breast enlargement for transgendered

 

Post a Comment

<< Home

Ring of Conservative Sites Ring of Conservative Sites
JOIN!

[ Prev | Skip Prev | Prev 5 | List |
Rand | Next 5 | Skip Next | Next ]