The Economics of Shortages

Ramsi A. Woodcock–

The price of food increased 2.6% in April, the largest single-month increase since 1974, but food industry executives are insisting that the country has enough food. So why are prices going up?

The explanation provided by the industry is that consumers are buying more than they need, creating shortages.

But a shortage is not a good excuse for increasing prices. Contrary to what you might have learned in Econ 101, there’s only one reason for which a shortage should give rise to higher prices: profiteering, as I explain in a forthcoming law review article.

If shortage were the only explanation for these price increases, then the increases would need to be condemned.

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Public Participation as a Privilege for the Immune? LPE on COVID-19 (vol. 5)

This post is part of our ongoing coverage of the COVID-19 Crisis from an LPE Perspective.

Sam Hull–

As the COVID-19 pandemic continues, debate has begun over when and how to restart society. Some proposals, such as those that call for seniors to sacrifice themselves for the good of “the economy,” expose the inherent inhumanity of those who valorize profits above all else.

Others have explored how to reinstate economic activity without abandoning public health considerations. German researchers have proposed the issuance of “immunity passports,” whereby workers who have already had COVID-19 and developed antibodies “could be issued with a kind of vaccination pass that would for example allow them to [be] exempted from restrictions on their activity.” Italian politicians across the political spectrum have adopted the idea, and the White House coronavirus task force is reportedly discussing it.

Even absent such policies, there is also the possibility that businesses (i.e. “the market”) could impose similar restrictions on their own employees. Worries about insurance payments, higher sick days, and potential shutdowns should an employee contract the virus might lead employers to restrict hiring to those who can prove immunity. And perhaps to fire those who cannot.

What to make of these possibilities?

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LPE on COVID 19

Dear Readers,

We’re living in strange times. As we try to make sense of the moment, LPE Blog wants to offer some COVID 19 coverage from our regular contributors. We’re starting today with some work that Amy Kapczynski has done with various colleagues.

To our LPE community, please send us links to your own educational and mutual aid efforts at managingeditor@lpeblog.org for these posts.

Above all, we hope you are well.

-LPE Blog

  • Five Ways public health officials should respond to coronavirus in the Philadelphia Inquirer, by Scott Burris, Amy Kapczynski, and Albert Ko.
    • Sneak peak: “Firstly, measures like contact tracing and quarantine will not work unless they are used in accordance with the law and accompanied by comprehensive social support measures and protections. Voluntary self-isolation measures are more likely to induce cooperation and protect public trust than coercive measures. If people expect hardship, they will avoid public health officials or not honestly report their contacts. Mandatory quarantine, regional lockdowns, and travel bans are difficult to implement, have large societal and economic costs, and disproportionately affect the most vulnerable. They should only be used if they are necessary, the least restrictive means needed to protect public health, justified by scientific evidence, and accompanied by strong support and legal protections.”
  • Alone Against the Virus in Boston Review, by Amy Kapczynski and Gregg Gonsalves.
    • Sneak peak: “Though we’ve had months to prepare, we have yet to reckon with the extraordinary risks that a pandemic like this poses in a country like ours. Those hardest hit will be the most vulnerable—the elderly and those with chronic diseases, particularly those in nursing homes, crowded homeless shelters, and prisons. We have no natural immunity to this new virus, and there is no vaccine. It will spread unchecked, from human to human and across our social gradients, unless we create social immunity, woven of the ways we interact and care for one another. But what kind of social immunity can we build in a body politic that has been ravaged for decades by neoliberal policies?”
  • Coronavirus and the Politics of Care here at LPE Blog, by Amy Kapczynski
  • This open letter by hundreds of public health experts on a fair and effective COVID 19 response.