...The Colvin brothers achieved national infamy on Saturday when the New York Times described their entrepreneurial spirit. They did what any good businessmen would: They bought low and sold high. What they bought and sold were face masks, anti-bacterial wipes, and hand sanitizer.Yes, well. The young Heroes of Economics bought 17,000+ bottles of sanitizer at normal retail prices ($4.00 or so) and was re-selling them at up to $60.00 each.
The story went viral, and the Tennessee Attorney General’s office announced that that it would investigate them for price gouging....
Here's where we have fun with the Ricardo/Hayek band of bumblers.
...What our would-be entrepreneur wanted to do is called arbitrage. Arbitrage moves goods from places where demand is low to places where it’s high....Now recall your Ricardo. He proposed that some countries are good at making wine, others are good at making cloth, so they should trade those goods, moving the goods to the demand. Of course, Ricardo's Rule would also demand that one move the workers from one place to the other, exactly as described by our Economic Genius.
No sweat!! Pack up your family in West Virginia or North Carolina and move them, bag, baggage, and chilluns, to Red China, or VietNam, or India.
The Colvins "argue" that since sanitizer is highly alcoholic, shipping is expensive. That may be true, but gee......WalMart sells the stuff, including "expensive shipping" for $4.00, not $60.00. Hmmmm.
Finally, our essayist dismisses 'moral' considerations, although he allows argument about them. Gee, that's swell--but it is also the key to decoding some "economic theories": morals do NOT play a part.
That's worth remembering.
Fortunately, most Americans still have a good sense of morality. For the time being, anyway.
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