Tam offers an important lesson:

Meanwhile, I will point out a basic bit of Capitalism 101: If Seller Sam asks $100 for a 50rd box of Remchester .22LR, and Buyer Bob gives him $100 for it,  then the price of a 50rd box of Remchester .22LR in that place, at that time, is $100.

It’s killed me that some of the same folks who were excoriating Obama for being a socialist were some of the first to scream “PRICE GOUGING!” when the law of supply and demand started to work its magic. If demand goes up, and price does not follow with it, you get a shortage. A lot of vendors didn’t want to be accused of that, and did not raise prices. So how’s that new AR you just bought? What about the 1000 rounds of .223? Yeah… shortage.

9 thoughts on “Capitalism”

  1. There’s going to be rationing one way or another; in addition, the price mechanism sends critical signals to producers (another reason to read Hayek’s essential and not very long The Road to Serfdom.) and provides them the money needed to ramp up production, be competitive in bidding for raw materials (there are plenty of other consumers of base metals), etc. etc. etc.

    Thanks for saying this, it’s been driving me up the wall.

  2. Not to mention that if a retailer sees scarcity (and thus price rises from their suppliers) coming and wants to be able to use revenue from one sale to fund inventory for the next, they have to increase the revenue from that first sale…otherwise they can’t restock the shelves.

    The “price gouging” myth is one of those awful things that’s permeated every pore of our society. Even normally conservative and rational people go insane when they see prices jump during greatly increased demand.

  3. True market price discovery would find product on shelves.

    Hoarders take advantage of those scared to be labelled as gougers.

    MidwayUSA is a good example, they still had sale pricing on BX25 mags two weeks ago. (at least half the price from gunbroker and CTD.) Limit 2 was the only thing slowing them down. I have two coming soon from the backorder that was available then.

    They had AK ammo that day too with no price increase.

    Everything out of stock now, but they avoided the ‘gouging’ label.

    Now the hoarders buy every mag and round they can find and FU to everybody else.

    It is not the hoarders fault though, its the lack of a true market.

  4. Yeah, I elaborated on the point in a comment on Tam’s post, pointing out that Seller Sam’s policy ensured that Purchaser Patty could later get at least some of the ammo she needed.

  5. I will agree until Seller Sam starts contributing to hysteria solely for the purpose of driving up the price. It’s not like we aren’t familiar with perpetual “fire sales” and “going out of business sales” and other outright lies that are used for making sales. I don’t know how many times I’ve been told “You’re going to be lucky to find another of those in the tri-state area,” only to find other dealers well-stocked, and that dealer’s shelves well-stocked two days later.

    God Bless the Capitalist, but don’t expect me to believe he sits at the right hand of God.

  6. This definitely needed to be said. Sorry, but you don’t get to decide what I buy and why as a buyer, or what I charge as a seller.

  7. We all had 4 years to buy all the ammo and guns we wanted; we didn’t because we thought Romney would win and because we made budget calls.

    If you didn’t need and couldn’t afford an AR in September, you don’t need one for February. Just because everybody else wants something, doesn’t change your need.

    Last year, ahead of a blizzard, I watched a mob at Lowe’s fight over a new box of snow shovels that had just been delivered by forklift from the back. 360 days of the year, no one buys snow shovels. But for one to five days a year, there is some guy who needs three (why does he need three? Maybe he’s afraid of the first two breaking?).

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