Mask manufactures are selling at retail. Rising prices on eBay don’t help them at all.
There is effectively no masks for retail in Hong Kong. I could order online, but that avenue has now been cut off.
There is this entire global market place people always seem to forget.
This is basic microeconomics. People haven't forgot it because they never learned it in the first place.
While it may be too late for this immediate epidemic, it also incentivizes middlemen to warehouse goods like masks which will help for the next epidemic.
"Health policy" has no exemption from economics. The way you get enough masks during high demand is by someone stockpiling them. If you want them to be cheap, someone has to stockpile even more of them. That could be the government, but only if they thought to do it ahead of time.
If they didn't, now you've got a market problem that pricing is the best way to address -- prohibiting price from rising due to demand only causes misallocation, because people who have more masks than they need have a reduced incentive to sell them to the people who need them. The first guy in the store buys fifty when he only needed one because he wanted to be sure to have enough, but then the store runs out before everyone has one and there are fifty unused masks in the one guy's basement.
Charging more is how you get him to not buy more than he needed.
You are talking about economics like a mathematical theorem when you know full well that economic behavior is an emergent social phenomenon and that people are not pure economic automata. This is disingenuous at best and dangerous at worst.
Which generally doesn't have to be ordered, because producers are already inclined to produce more during high demand.
You might also want to worry about the business consequences of ordering suppliers of critical products to spend money increasing capacity on an emergency basis without increasing their sales price. With no way to recover their now-higher costs, what happens when you drive them out of business and then need them again next time?
> and to set rules about distribution like limiting people to one box at a time or whatever
Which fails because some people have a legitimate need to buy in quantity, but it's an administrative nightmare to determine exactly who those people are and each failure to correctly identify results in a large quantity of items not going to people who legitimately need them.
It also violates the social distancing principle. Instead of sending one person from an office to the store to buy a box for each person from the office to take home, now every employee has to individually visit the store and create a new opportunity to transmit or receive an infection with other patrons or staff there.
> Markets are typically closer to economic optimality over the longer run but not in the short term,
There is no principle that markets are more optimal in the long run than the short run. Market failures exist, but they exist where they exist and not where they don't.
A huge demand spike isn't a market failure. The higher prices cause markets to do exactly what you want in that context -- increase production and reduce hoarding.
> and furthermore optimality is not always that important for many commodities that can be stockpiled against future emergencies.
This only works if they actually were stockpiled ahead of time, in which case there wouldn't be such a supply shortage that prices would rise to undesirable levels.
Even if the masks were actually being used properly, people who need masks the most after the sick, are the people we pay the lowest, retail workers, food service, people who come in contact with extreme numbers of people on a daily basis.
Well paid tech employees can work from home, take 2 weeks of sick days and continue to make thousands a week.
These people will come into work even if they’re anything short of dying because they’re more likely to live paycheck to paycheck when we don’t pay them enough, and the free market has decided not to give them sick benefits that we all benefit from.
The free market is actually externalizing the issue to all of at this point. Don’t give workers enough sick days and keep all that profit, but then when the workers end up spreading the virus as a result of their boneheaded policies, the public will suffer, and the government will pay dearly.
I doubt it was to help individual citizens and families survive a crisis.
There's absolutely no "free market" anymore during panic.
Which is what pricing is for. If people start hoarding then the price goes up and makes hoarding much more expensive. Not only that, it gives the people with a stockpile a financial incentive to put it on eBay and thereby make it available for distribution to other people. Unless they're prohibited from doing so, in which case they carry on hoarding.
Now an interesting plot twist: Those masks not only do not protect against coronavirus (because the virus is too small, and can get through), they actually increase the risk of infection (because they serve as virus incubators, especially when they become wet)
Maybe he won't give anything up because price might keep going up and whenever he needs the masks they will be so costly he cannot afford them. Or maybe the price rise will give some party an incentive to stockpile masks because making money is a clear incentive instead of a more nebulous "avoid a health crisis".
The lead time to start manufacturing simple products like masks isn't that long. That puts a time limit on the high prices -- even if the demand stays high, supply catches up to it. (Compare this to, say, housing where increasing supply is constrained by zoning which prevents supply from increasing in response to demand.)
From Wikipedia:
The new Whig administration, influenced by the doctrine of laissez-faire,[11] believed that the market would provide the food needed, and they refused to intervene against food exports to England, then halted the previous government's food and relief works, leaving many hundreds of thousands of people without any work, money, or food.
Charles Trevelyan, who was in charge of the administration of government relief, limited the Government's food aid programme because of a firm belief in laissez-faire.[98]
One year later, the British government did intervene by building workhouses to help house the poor tenant farmers. However this made the situation worse because instead of the British government funding the houses, they taxed the Irish landowners triggering mass evictions of the poor tenant farmers.