First, thks guy desperately needs PR - his hero self-image makes him look even worse than Shkreli. In this case, all they'd need to say is that Mr Corvin is interested in moving products in areas with low demand, such as rural Tennessee and Kentucky, to people in desperate need in areas with high demand like the big coastal cities or for example those with certain immune disorders. That's all they should say.
Second, let's try to separate feelings for the person (Corvin) from the activity (price gouging). When there's a shortage between quantity demanded and the quantity supplied, there has to be some form of quantity restriction, whether that involves price increases, queueing, quotas or even lotteries. The alternatives are not a person buying sanitizer for $10/bottle on Amazon versus $1/bottle at Safeway, but between $10/bottle on Amazon versus either not getting it, waiting in a long queue at a store (which is counterproductive to social distancing), having some sort of quantity restriction (which is really lousy for people buying for more than just themselves). It's not clear to me at first glance which is worse.
Ultimately, the shortage problem can only be mitigated by additional production or a return to pre-crisis demand. There are probably quite a few producers who could temporarily retool in order to produce sanitizer or other supplies that are in high demand, but this would be costly and risky and disrupt their supply chains and distribution. They could only justify the move with significantly higher prices than the pre-crisis market price. Any such firms would be crazy to do this, given the legal proscription and moral outrage incumbent with price increases during a crisis. There might be a few firms that try to enter as a PR move, and maybe in some places, the government will subsidize production of demanded goods at a low price, but these are not sustainable options. By having a very absolutist stance against price gouging, we are preventing the potentially ameliorating effects of additional production albeit at a higher price.
Third, I am a little disgusted with the NYT for publishing this story. While they can't be blamed for Corvin's diarrhea of the mouth, they did find the person to profile who is maximally unsympathetic person to the NYT's audience: ex-military, lives in the South (and judging by his yard, a hillbilly), not well-educated and has a job (Amazon reseller) that is low status. It may be newsworthy that someone in rural Tennessee has 17k bottles of sanitizer, but I can easily imagine the sort of entrapping questions that the reporter used with this guy, and it makes me, well, irritated. (Anyone who has had experience with a hostile reporter and went in unprepared knows what I'm talking about.) The NYT is taking advantage of this crisis to drive outrage clicks, just as much as this guy is taking advantage to profiteer. In the process, they're making this guy the public face of "price gouging" during COVID-19, despite him being very much a private person unprepared for the scorn about to be unleashed on him and his family.
I think the best way out of this is for someone with charitable intent and the monetary means to buy up his supply close to at-cost (I'd guess $40-50k), and then distribute them to particularly vulnerable people at low prices or even gratis. Corvin himself could maybe do that. If he did have a change of heart, I somehow doubt the NYT would cover it so prominently, if at all. For the sake of all parties, I hope I'm wrong.
I talked to this reporter, although my quote didn't make it into the article. About halfway through, he asked me my thoughts on the morality of selling face masks when the government was recommending against hoarding, and I realized it was a gotcha question, which I dodged.
Afterwards, I sent him this message:
>I thought a bit more about your morality question re governments asking people not to buy masks, and on second thought I'd answer as follows:
>The government's interests are not necessarily the same as individuals. Clearly the masks have some utility or the government wouldn't want them for their own healthcare workers. Is it moral for the government to ask me to go without a mask and expose myself to some additional risk to further the government's interests? Is it immoral for someone to refuse such a request? Clearly people are willing to pay for masks, and if they value the masks more than the government does (which they do if they're willing to pay more than the government is paying), then why is it more moral for those masks to go to the government?
>The government can easily corner the market on masks if they choose to do so. Declare publicly they'll pay $X/mask, buy up all masks, and give them out at their own convenience. If they choose not to do so, I don't think it's immoral for private businesses to help private individuals obtain the masks they want, even if the government would prefer to get their hands on more.
>I believe I saw a figure of 3.5 billion masks that the US is trying to acquire over the next year or so. Do the math. If they want to get 350 million in the next month, they can offer $5-10/mask and would easily corner the market.
>I do happen to think it's flagrantly immoral for the government to restrict testing capacity, as your paper recently documented
>In light of that and other incompetence from the US government, it's hardly unreasonable for people to be skeptical of guidance saying that people shouldn't wear masks.
>And even if it's true that wearing masks has little utility now, it can still be rational to buy masks now for use in the near future. If this spreads further and the shortage gets worse, which is possible, buying masks now will seem brilliant in retrospect.
First, thks guy desperately needs PR - his hero self-image makes him look even worse than Shkreli. In this case, all they'd need to say is that Mr Corvin is interested in moving products in areas with low demand, such as rural Tennessee and Kentucky, to people in desperate need in areas with high demand like the big coastal cities or for example those with certain immune disorders. That's all they should say.
Second, let's try to separate feelings for the person (Corvin) from the activity (price gouging). When there's a shortage between quantity demanded and the quantity supplied, there has to be some form of quantity restriction, whether that involves price increases, queueing, quotas or even lotteries. The alternatives are not a person buying sanitizer for $10/bottle on Amazon versus $1/bottle at Safeway, but between $10/bottle on Amazon versus either not getting it, waiting in a long queue at a store (which is counterproductive to social distancing), having some sort of quantity restriction (which is really lousy for people buying for more than just themselves). It's not clear to me at first glance which is worse.
Ultimately, the shortage problem can only be mitigated by additional production or a return to pre-crisis demand. There are probably quite a few producers who could temporarily retool in order to produce sanitizer or other supplies that are in high demand, but this would be costly and risky and disrupt their supply chains and distribution. They could only justify the move with significantly higher prices than the pre-crisis market price. Any such firms would be crazy to do this, given the legal proscription and moral outrage incumbent with price increases during a crisis. There might be a few firms that try to enter as a PR move, and maybe in some places, the government will subsidize production of demanded goods at a low price, but these are not sustainable options. By having a very absolutist stance against price gouging, we are preventing the potentially ameliorating effects of additional production albeit at a higher price.
Third, I am a little disgusted with the NYT for publishing this story. While they can't be blamed for Corvin's diarrhea of the mouth, they did find the person to profile who is maximally unsympathetic person to the NYT's audience: ex-military, lives in the South (and judging by his yard, a hillbilly), not well-educated and has a job (Amazon reseller) that is low status. It may be newsworthy that someone in rural Tennessee has 17k bottles of sanitizer, but I can easily imagine the sort of entrapping questions that the reporter used with this guy, and it makes me, well, irritated. (Anyone who has had experience with a hostile reporter and went in unprepared knows what I'm talking about.) The NYT is taking advantage of this crisis to drive outrage clicks, just as much as this guy is taking advantage to profiteer. In the process, they're making this guy the public face of "price gouging" during COVID-19, despite him being very much a private person unprepared for the scorn about to be unleashed on him and his family.
I think the best way out of this is for someone with charitable intent and the monetary means to buy up his supply close to at-cost (I'd guess $40-50k), and then distribute them to particularly vulnerable people at low prices or even gratis. Corvin himself could maybe do that. If he did have a change of heart, I somehow doubt the NYT would cover it so prominently, if at all. For the sake of all parties, I hope I'm wrong.